September 22, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
San Diego-based Cytori Therapeutics, Inc. will lay off 42 full-time employees and an executive vice president will resign as it begins a restructuring process designed to free up liquidity to pay off the firm’s lenders, the company said Monday.
Rumors of Cytori’s shakeup sent its share price soaring 6 percent on Friday, a climb it continued during today’s trading. The uptick reversed the recent decline in its stock, which is now down a little over 27 percent in the past one-month time frame.
As part of the initiative, Clyde Shores, Cytori’s executive vice president of marketing and sales, resigned and a number of other employees have left or will be leaving the company after a brief transition period.
The company said that after these measures are complete it will incur a one-time restructuring charge of approximately $500,000. The consolidation and cost reduction initiatives over the past several months are expected to lower its operating expenses by more than $8 million on an annualized basis.
Cytori said it would use the restructuring to expand its U.S. clinical pipeline, build on current governmental and corporate partnerships, and ensure that its commercial efforts are cash flow positive immediately. It will immediately begin shuffling its senior management and the global commercial and development ranks.
“Besides significant changes in strategy and expense reductions, we are also working in partnership with our lenders, with whom we have an outstanding relationship, to strengthen our financial position for the next 12-24 months,” said Marc Hedrick, Cytori’s president and chief executive, in a statement.
Cytori said its lenders have recently provided a temporary waiver of the liquidity threshold that requires it to maintain certain minimum cash balances, and that it is in talks to restructure its loans. The company will provide more details on a third quarter conference call to be held later this fall.
