Boulder's Array Biopharma Cuts 20 Percent of Workforce
Boulder's Array Biopharma Cuts 20 Percent of Workforce [Daily Camera, Boulder, Colo.]
From Daily Camera (Boulder, CO) (June 14, 2011)
June 13--Boulder-based Array BioPharma Inc. plans to lay off 70 people -- 20 percent of its work force -- as a means to focus resources on its clinical development programs, officials for the local biotech announced late Monday.
The affected employees -- who will remain employed by Array through the end of the week and will receive severance packages -- work primarily in the areas of discovery research and support positions and were based across the company's sites in Boulder, Longmont and Morrisville, N.C., said Tricia Haugeto, a company spokeswoman. The majority of Array's 350-person staff work in Boulder County, she said.
Array's actions are the second major blow to the Boulder-area's biotechnology sector in just as many weeks.
On June 1, Thousand Oaks, Calif.-based Amgen Inc. reported to the Colorado Department of Labor and Employment that it planned to lay off 134 employees in Boulder and Longmont. A company spokeswoman said the reductions were part of an effort to "optimize the manufacturing capacity utilization in Colorado."
The reductions announced Monday by Array are intended to provide "a more appropriate balance" between Array's drug discovery and development groups, officials said in the announcement released after the markets closed. As a result of the restructuring, Array will maintain a smaller research staff to further the company's partnership programs with biotechs such as Celgene, Amgen and Genentech, officials added.
"It is extremely difficult to release these outstanding people who have contributed substantially to the company over the years, but these actions are necessary given our need to focus resources on our key clinical development programs," Robert E. Conway, Array's chief executive officer, said in a statement.
Haugeto said Array officials declined to comment beyond the information included in the release.
Array plans to "aggressively" advance some of its early stage cancer drugs including ARRY-520, a kinesin spindle protein inhibitor for multiple myeloma; ARRY-614, a small-molecule p38/Tie-2 inhibitor for myelodysplastic syndrome and MEK162, an MEK inhibitor for cancers. Array is co-developing MEK162 with Novartis.
Array expects to incur a one-time restructuring charge of $3.5 million during the fourth quarter of its 2011 fiscal year for severance payments the company will pay in cash during both that quarter, which ends on June 30, and the first quarter of its fiscal 2012 year, officials said.
Array modified its guidance to reflect the operational changes. For its fiscal year 2012, the company is projecting a $20 million reduction in net cash used in operating activities and also is expecting to use $40 million for operating activities.
As of March 31, Array had $76 million in cash, cash equivalents and marketable securities.
Last month, Array reported a narrowing of its fiscal third quarter net loss to $11.5 million, or 20 cents per share, from $15.2 million, or 30 cents per share for the comparable year-ago quarter. Revenue, however, slipped to $17.8 million from $18.4 million.
The company concurrently announced a modification of its loan with Deerfield Partners by issuing $30 million of its Series B stock to Deerfield affiliates and reducing the credit facility's principal to $90 million.
Shares of Array (Nasdaq: ARRY) dropped 2 cents, or 0.84 percent, to $2.37.
Contact Camera Business Writer Alicia Wallace at 303-473-1332 or email@example.com.
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Posted: June 2011