Maxygen Increases Focus on Advancing Key Therapeutic Products And Reducing Costs
Wednesday November 13, 4:05 pm ET
REDWOOD CITY, Calif., Nov. 13 /PRNewswire-FirstCall/ -- Maxygen, Inc. (Nasdaq: MAXY - News) today announced that it will reduce operating expenses and focus the company's efforts on advancing key therapeutic products. As part of its rationalization activities, Maxygen is eliminating approximately 30 positions, or 10 percent of the company's worldwide staff. After the reduction in workforce, the company will have approximately 285 employees.
"This announcement is consistent with our goal of focusing our spending on advancing Maxygen products with significant potential commercial value," said Russell Howard, Ph.D., Chief Executive Officer of Maxygen. "The reduction in expenses that will result from this restructuring is intended to provide Maxygen with greater flexibility in rapidly advancing the most promising product candidates from our broad human therapeutics pipeline for internal development or later-stage partnering. At the same time, Maxygen will continue to advance multiple products via existing partnering activities."
"Consistent with our investment strategy for our lead portfolio, Maxygen will focus on advancing multiple internally developed leads that continue to progress towards clinical trials. Our partnered pre-clinical product candidates are also progressing towards clinical trials. Currently partnered product candidates include an improved interferon gamma in development with InterMune, for which Maxygen recently received a $1M milestone payment for successfully achieving drug performance criteria; and an improved interferon beta in development with Lundbeck that is currently in late stage pre-clinical development. As part of our focus on key commercial programs, Maxygen will seek external partner and grant funding for our DNA-based vaccine programs, including a preventative Dengue virus vaccine and a therapeutic colon cancer vaccine, both of which are currently in non-human primate trials," continued Dr. Howard.
"Maxygen has a strong cash position, which is clearly a valuable resource in the current turbulent financial markets. We believe that our increased focus on key product candidates and ongoing financial prudence will enable us to continue to control our cash burn and establish the foundation for Maxygen's future growth," said Dr. Howard. "Nevertheless, the decision to reduce staff was difficult since we recognize that the dedication and innovation of our employees has allowed Maxygen to meet or exceed the ambitious goals that we have set for the company each year. We are concerned about our employees and will be providing severance packages and outplacement assistance to employees affected by this restructuring to reflect our appreciation for their contribution to our company's growth and to aid them through this transition," concluded Dr. Howard.
At October 1, 2002, Maxygen retained a cash position of $238.6 million, of which approximately $25 million was controlled by the company's majority owned subsidiary, Codexis, Inc. The company expects to recognize a one-time total charge of approximately $800,000 in 2002, primarily associated with involuntary termination benefits. The company continues to anticipate a burn rate of approximately $30 million for 2002, including the one-time charge. Maxygen plans to announce its 2003 financial guidance at the JP Morgan H&Q conference in January 2003. |
