Drug developer Epix Pharmaceuticals Inc. (Nasdaq:EPIX) published its financial report for the fourth quarter and full year of 2008 on Thursday. The company announced that it was halving its workforce, just one day after announcing receipt of a milestone payment from Cystic Fibrosis Foundation Therapeutics (CFFT). The company added that unless it obtains new financing, it has only enough money through August.
Epix will fire 44 employees at its Lexington, Massachusetts headquarters and Israeli office. President and chief executive Dr. Elkan Gamzu also halved his salary. The company expects to save $4.4 million a year from these measures.
Epix posted $3.8 million revenue for the fourth quarter, down from $5.9 million for the corresponding quarter of 2007. The company posted $28.6 million revenue in 2008 compared with $15 million in 2007. Most revenue came from reimbursed costs and milestone payments from its collaborations with GlaxoSmithKline plc (NYSE; LSE: GSK) and CFFT.
Epix narrowed its net loss to $36.7 million ($0.88 per share) in 2008 from $62.8 million in 2007. The net loss for the fourth quarter fell to $10.4 million ($0.25 per share) from $12.3 million for the corresponding quarter of 2007.
Epix had $24.6 million in cash and cash equivalents at the end of 2008, down from $61.1 million a year earlier. The company said that it had enough money to last through August 2009, taking into account layoffs and other cost-cutting measures. The company added that it will have to raise more capital to survive beyond August. The cost-cutting measures included reducing R&D spending, which fell to$46.2 million in 2008 from $57.5 million in 2007.
The day before publishing its financials and announcing the layoffs, Epix received a $500,000 milestone payment from CFFT. The payment brought the total milestone payments to $5 million. The payment was for successful completion of an in silico high throughput screening for the most common form of cystic fibrosis.
Epix's share closed at $0.35 on Nasdaq on Friday, giving a market cap of $14.6 million.
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2009
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