Once a rising star in Seattle’s biotechnology community, Dendreon Corp. announced Tuesday that it is reducing its staff by 15 percent in an effort to accelerate a path to profitability and operate “as a leaner, more nimble biotechnology company.”
The cuts of about 150 people are the latest setback at Dendreon, which eliminated 500 jobs in a shakeup two years ago. The company will employ 820 people after the latest layoffs, down from a peak of 2,000 people.
The layoff announcement came amid Dendreon’s third quarter earnings report in which the company reported a 12.8 percent decline in product revenue, coming in at $68 million. The net loss was trimmed to $67.2 million, down from $154.9 million for the same quarter last year. The company had $233.3 million in cash, cash equivalents, and short-term and long-term investments at the end of the third quarter.
CEO John Johnson had this to say in a press release:
“Accelerating the path to profitability has been a top priority for Dendreon. Consistent with that goal, we are restructuring the company and implementing additional cost reductions to enable Dendreon to succeed as a leaner, more nimble biotechnology company focused in immuno-oncology. Our plan enables us to slow our cash burn and be better positioned to achieve profitability while continuing to make strategic investments in manufacturing automation, select European initiatives and ongoing clinical development programs, including our combination and sequencing studies. We are confident that with the successful execution of our plan, we can create value for shareholders, physicians and patients.”
The latest restructuring will reduce operating expenses by more $125 million from the current 2013 run rate. The company will take an initial $7.5 million charge related to severance and other termination benefits, with the restructuring taking up to six months.
Dendreon is the maker of Provenge, a cancer therapeutic that was approved in the U.S. in April 2010. At that time, Dendreon’s stock soared above $50 per share.
Today, the company is trading for $2.60 with a market value of $410 million.
In October, Bloomberg News reported that Dendreon had hired investment bankers to investigate potential acquisition offers.