XOMA Announces Workforce Reduction

XOMA Ltd. will reduce its workforce by approximately 42% or 144 employees, mostly from manufacturing positions. The company expects to cut costs by $27 million when the changes are completed in 2Q09, and will incur a charge of approximately $3 million for severance and other related costs.
   
The company will end up with 197 employees to develop XOMA 052, an anti-inflammatory antibody drug candidate for the treatment of Type 2 diabetes, develop and license technology, continue antibody discovery and development efforts with its pharmaceutical partners, and work with the U.S. government in biodefense.

“We have made a difficult, but necessary, decision driven by extremely challenging market conditions. Although manufacturing was fully utilized 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,” said Steven Engle, XOMA’s chairman and chief executive officer.

The company contends that it has sufficient quantities of XOMA 052 on hand for planned studies, which includes a Phase II study expected to begin in 2Q09. The company will maintain its pilot scale manufacturing plant and the potential to resume large scale manufacturing in the future.