06 August 2008

Pharmacopeia to lay off 40% of workforce

According to MarketWatch, Pharmacopeia announced yesterday (Tuesday) that it "plans to lay off approximately 40% of its workforce through termination of positions. The move adds to a reduction of about 15% of employees at the Princeton, N.J., biotech firm in May, made through both attrition and terminations. The firm said it expects a $3 million charge in the third quarter related to serverance payments. As a result of its reductions in operating expenditures, Pharmacopeia said it expects cash burn for the quarter ending Dec. 31 to be approximately $10 million, excluding severance-related costs."

As the money markets dry up, more companies will seek to cut their running costs, to make their cash reserves last that bit longer. Biotech companies (few of whom post profits) will be particularly at risk from the "credit crunch". Products, early revenues and profits are now the order of the day. In our sector, early licencing candidates will be key, and companies such as Vitae, Astex, Incyte, Onyx and OSI, with optimized candidates in hand, will be the ones to watch.

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