XOMA has dramatically cut back on its manufacturing staff as part of restructuring that will lay off 42 per cent of the company’s total employees.
The move will affect 144 employees and has been taken in response to forecasts that the company’s manufacturing capacity will be underutilised in 2009.
Having manufactured sufficient quantities of XOMA 052 for planned Phase II studies the company is cutting back and will cease large scale production.
XOMA is retaining the potential to resume large scale manufacturing in the future but for now will just maintain its pilot production capacity.
Steven Engle, chairman and CEO of XOMA, said: "We have made a difficult, but necessary, decision driven by extremely challenging market conditions. Although manufacturing was fully utilised in the fourth quarter, forecasted manufacturing demand in 2009 will not meet expectations.
“The reductions are focused on manufacturing and related areas and associated general and administrative support. Today's actions will bring operating expenses more in line with expected revenue."
XOMA will incur a $3m charge in the first quarter of 2009 as it pays for severance and other charges related to the restructuring. However, once this charge has been paid the company expects to realise annualised savings of $27m.
The remaining 197 employees will continue to develop its anti-inflammatory antibody drug candidate XOMA 052 for the treatment of Type 2 diabetes.
In addition XOMA will continue to work on antibody discovery and development in conjunction with its pharmaceutical partners and the US government.