Thursday, biopharmaceutical company EPIX Pharmaceuticals, Inc., (EPIX) reported a narrower loss in the fourth quarter, primarily reflecting lower research and development expenses. In addition, the company announced a 50% reduction in its workforce and a 50% voluntary reduction in Chief Executive Officer's annual salary.
The Lexington, Massachusetts-based company reported a fourth-quarter net loss of $10.4 million or $0.25 per share, compared to a loss of $12.3 million or $0.33 per share in the year-ago period.
On average, four analysts polled by Thomson Reuters expected the company to report a loss of $0.29 per share. Analysts' estimates typically exclude special items.
Quarterly revenues declined to $3.8 million from $5.9 million last year, but came in above analysts' estimate of $3.47 million.
In the fourth quarter, EPIX's research and development expenses fell to $7.6 million from $14.3 million a year ago, primarily due to a combination of decreased clinical trial costs associated with the discontinuation of PRX-00023 and the decrease in costs associated with the October 2008 reduction in force and narrowed clinical and preclinical development focus.
For the full year, the company reported a net loss of $36.7 million or $0.88 per share, compared to a loss of $62.8 million or $1.85 per share in the prior year. Revenues for the full year increased to $28.6 million from $15.0 million a year earlier.
Wall Street analysts expected the company to report a loss of $0.92 per share on revenues of $28.01 million for the full year.
The company said it is further reducing its cost structure by cutting its workforce by about 50%, effective immediately. In addition, the company's President and CEO Elkan Gamzu made a decision to voluntarily reduce his annual base salary by 50% until further notice. Gamzu will, however, continue to perform his management duties on a full-time basis.
The reduction in workforce is expected to result in a decrease of about $4.4 million in annual salary and benefits costs. Estimated charges of about $0.6 million related to the reduction will be recorded in the first quarter of 2009, the company noted.
This newly announced reduction, combined with the earlier action taken in October 2008, is expected to result in a total decrease in annual salary and benefits costs of about $7.4 million to the company.
Commenting on the decision, Kim Drapkin, Chief Financial Officer said, "We believe our recent corporate actions will allow us to further align our current resources with our best near-term clinical development opportunities as well as focus on our preclinical programs that are largely supported by our partners."
EPIX is currently trading at $0.34, down $0.13 or 27.66% on the Nasadq.
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