XOMA Corp. (XOMA: Quote) announced that it plans to reduce personnel by 84 positions, or 34%, including 50 positions to be eliminated immediately and the remainder by the end of the first quarter of this year.
XOMA said that the staff reductions result primarily from its decisions to utilize a contract manufacturing organization for Phase 3 and commercial production and to eliminate internal research functions that are non-differentiating or that can be obtained cost-effectively by contract service providers.
The company said that it anticipates taking one-time charges for restructuring and related severance costs totaling approximately $6.0 million during 2012, of which $3.9 million will result in cash charges. In the first quarter of 2012, the Company expects to take a charge of approximately $3.6 million.
As a result of the changes, XOMA expects to reduce ongoing net internal spending by approximately $14 million in 2012 compared to the 2011 level. This reduction in fixed costs allows investment of a similar amount into gevokizumab's clinical development during 2012.
The company also said that it will not be providing specific guidance on overall revenues or cash receipts for 2012 so as to best manage its ongoing business development discussions and other activities. The Company currently anticipates cash used in ongoing operating activities in 2012 to be approximately $35 million.
by RTT Staff Writer
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