Peregrine Slashes Workforce by 20% in Cost Cutting Plan
Published: Aug 11, 2017
August 11, 2017
By Alex Keown, BioSpace.com Breaking News Staff
TUSTIN, Calif. – Shares of Peregrine Pharmaceuticals are climbing slightly this morning after the company announced it will slash its workforce by 20 percent as part of a plan to reduce costs while it pursues strategic options for its research and development assets.
The job cuts were made to multiple departments, with the bulk hitting its research and development team. Part of the terminations include a 50 percent reduction of Peregrine’s research and development staff, which drops the number of that team to 11 employees. In its announcement this morning, the company said it intends to terminate 60 employees in its “strategic action” to put the company in a better position to achieve overall profitability. With the terminations, Peregrine said it expects the layoffs to result in a cost savings of between $3.7 million and $4.3 million in fiscal year 2018 and more than $7 million in reduced annualized operating expenses beginning in fiscal year 2019.
Peregrine said the remaining staff in its R&D operations will support potential strategic alternative for its developmental assets, while “continuing to assist with collaborative trials, the antibody discovery platform, and the exosome program.”
Personnel supporting the Avid Bioservices CDMO business, a wholly owned subsidiary of Peregrine Pharmaceuticals, was reduced by 20 percent to 184 employees to align operations with the reduction in forecasted revenues.
Other cuts were made in Peregrine’s sales department, as well as administrative. The company said those areas saw an 8 percent reduction in staff, which drops those numbers to 49 employees. The company said it is looking to maintain leaner support operations.
Steven King, president and chief executive officer of Peregrine and Avid, said the jobs cuts were a difficult decision, but a necessary one as the company continues “to evaluate strategic options to further strengthen our two distinct businesses and seek to maximize shareholder value." King added that the company remains committed to “capitalizing on long-term opportunities” available to Avid, while pursuing the “best path forward” for the company’s research and development business.
The layoffs come one month after Peregrine announced it was expanding its board of directors as part of the strategic review. The expansion was aimed at adding board members with CDMO and biologics experience and to commence a search for a dedicated president to head its Avid CDMO business.
It was less than two weeks ago that King said the company was looking at options to advance its R&D business. In July, he said the company was seeing “renewed and encouraging interest” in the company’s bavituximab program. Bavituximab is an investigational chimeric monoclonal antibody that targets phosphatidylserine (PS). Signals from PS inhibit the ability of immune cells to recognize and fight tumors. Bavituximab is believed to override PS mediated immunosuppressive signaling by blocking the engagement of PS with its receptors as well as by sending an alternate immune activating signal. Last year following a failed Phase III trial of bavituximab, Peregrine said it was taking a new course with bavituximab that focuses on a development strategy conducting small, early stage studies of bavituximab in combination with other immuno-oncology agents.