More than 600 employees will lose their jobs as the companies reshape their corporate strategies.
Shares of Inovio Pharmaceuticals are down more than 10% in premarket trading after the company announced it will terminate 28% of its workforce as it aims its corporate strategy to focus on the commercial development of its late-stage human papillomavirus treatment.
In an announcement this morning, Pennsylvania-based Inovio said it cut selected early-stage R&D programs and discontinued further development of its Phase I/II study in advanced bladder cancer, as part of an effort to reduce its annual burn rate by 25%. Additionally, the company is slashing more than one-fourth its workforce, about 80 employees, to achieve its goals.
Inovio Chief Executive Officer Joseph Kim said the company undertook this strategic action to “create a more efficient organization with greater financial flexibility and a longer runway.”
“With a refined strategy, Inovio will continue to advance our later-stage HPV programs while devoting more resources to develop fast-to-market product candidates such as GBM, RRP and dBTEs. We continue to expect near-term value drivers in the second half of this year that include interim data from Phase II studies targeting HPV-related vulvar and anal dysplasia and from our Phase II GBM study. We also anticipate the potential for significant new partnerships as our technology continues to attract attention from U.S. and international markets,” Kim said in a statement.
Inovio said the cuts and realignment will not impact programs it has in collaboration with partners, such as its MEDI0457 in HPV-related cancers with AstraZeneca and its Lassa and MERS vaccine programs with CEPI.
Inovio isn’t the only company to slash its workforce this month. Amneal Pharmaceuticals will cut 550 employees by the end of 2020 and close down a manufacturing facility located in Hauppauge, N.Y., and a packaging facility in East Hanover, N.J. The company announced the cuts and closings in a filing with the U.S. Securities and Exchange Commission. That same day, the company announced it was undertaking a comprehensive restructuring plan due, in part, to the uncertainty of its supply of the epinephrine auto-injector, AdrenaClick. That announcement did not include the information regarding the layoffs but the job cuts were hinted at.
According to a report in Newsday, Amneal will transfer production of oral solid medicines from Hauppauge to a larger factory in South Yaphank, as well as to other sites. David Belian, a company spokesman, told Newsday that there could be some layoffs at the South Yaphank site but would not disclose additional information.
Amneal said it estimates it will incur a pre-tax restructuring charge of approximately $10 to $12 million related to severance benefits. The company said it could not estimate decommissioning and dismantling costs of the two properties at the time of the filing. When it announced the restructuring, Amneal said key elements of will include “substantial operating budget reductions and revised, more efficient organizational structures across all company functions.” Amneal will revise its remaining 2019 financial guidance metrics when it reports its second-quarter 2019 results on Aug. 8.
