EPIX Pharmaceuticals, a MR contrast agent developer, is reducing its cost structure by decreasing its work force by approximately 23 percent, and narrowing the current focus of its research and development efforts, effective immediately.
The Lexington, Mass.-based company said it plans to devote its resources to its lead clinical programs; PRX-03140 being developed for the treatment of Alzheimer's disease and PRX-08066 being developed for the treatment of patients with chronic obstructive pulmonary disease and moderate-to-severe pulmonary hypertension, as well as its partnered preclinical programs with GlaxoSmithKline and Cystic Fibrosis Foundation Therapeutics.
EPIX estimated that the reduction in its work force will result in a decrease to its annual salary and benefits costs of approximately $3 million. In addition, the company will realize a reduction in future research and development spending associated with the narrowing of its research focus. Estimated charges of approximately $300,000 will be recorded in the fourth quarter of this year in connection with one-time employee termination benefits, including severance and other benefits.
The company said it will provide additional details on the longer-term financial benefits of the changes in connection with the issuance of its 2009 financial guidance.
“While this type of action is always very difficult, we believe it is in the best interest of EPIX stakeholders that we closely align our current resources with our strongest near-term opportunities for success," said Kim C. Drapkin, chief financial officer of EPIX. “Given the tough market conditions, the board of directors and the management team agreed that our development efforts should be focused on our lead clinical stage opportunities as well as our preclinical programs that are largely supported by our partners. We believe this strategy coupled with our potential success in monetizing Vasovist, our novel blood pool magnetic resonance angiography agent, will strengthen the foundation for future success at EPIX.”