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Cell Genesys Inc. shares dropped sharply today as the South San Francisco company said it will cut more than 200 jobs, is exploring its sale or liquidation, and stopping the late-stage trial of its prostate cancer drug.
The company (NASDAQ: CEGE) also said it was terminating the employment of Chief Medical Officer Robert Dow.
Cell Genesys shares were down 45 cents — or 73 percent — to 17 cents per share in mid-day trading.
Cell Genesys in August stopped the 408-person Phase III trial of its prostate cancer treatment GVAX because significantly more people taking the drug died than in the control group not receiving the treatment.
“The company is exploring its strategic alternatives, including merger with or acquisition by another company, further restructuring of the company and allocation of its resources toward other biopharmaceutical product areas, and sale of the company’s assets and liquidation of the company,” Cell Genesys said in a filing with the Securities and Exchange Commission.
The board of directors has committed to a restructuring plan, the company said, that initially will lead to cutting nearly 220 jobs from its 290-person workforce by the end of the year. Further staff cuts are expected in the first half of 2009, the company said, as “additional activities are phased out.”
Employees losing their jobs will receive unspecified severance payments, outplacement assistance and continuation of benefits.
Cell Genesys will take a charge of about $12.8 million in the fourth quarter relating to the personnel part of the restructuring.
In addition to Dow, the company said it also is cutting the jobs of Kristen Hege, vice president of clinical research; Michael Ramsay, senior vice president of operations; and Peter Working, senior vice president of research and development by Oct. 30.
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