PALO ALTO, Calif. -- Collagen Corp. said Monday it has madecompanywide cuts that it said should reduce annual expensesby about 11 percent, or $5 million.

The Palo Alto-based company (NASDAQ:CGEN) said cuts includereductions in temporary help, contract employees, outsideconsultants, travel expenses, capital expenditures and overtimehours. In addition, 10 of the approximately 280 staff positionswere eliminated. The cuts will not affect the company'ssubsidiary, Target Therapeutics, Collagen said.

David Foster, vice president and chief financial officer forCollagen, said the cost cutting was a result of the recession andadverse publicity. He said the FDA's inquiry into Collagen'sproducts last summer helped to slow sales. The company saidthe main decrease was in the domestic injectable business.

Collagen's main focus is to develop, manufacture and marketbiomedical devices for treatment of defective, diseased,traumatized or aging human tissues.

"This decision was made with careful consideration of ourcorporate goals to preserve and develop the company'stechnology and market franchises, safeguard our ability tolaunch new products and support current products both in theUnited States and overseas," Howard Palefsky, Collagen'spresident and chief executive officer, said in a statementreleased Monday.

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