Pharmacopeia… When Biotechs Cut Jobs (PCOP)
Pharmacopeia Inc. (NASDAQ: PCOP) has announced this morning that it will implement a 15% reduction to its work force. The company is making an effort to save on expenses and to focus its liquid resources on clinical and later-stage programs.
The company is also reviewing other expenses and with the 15% headcount reduction it expects to save approximately $10 million per year. The company will take approximately $800,000.00 in charges from employee severance charges. While seeing a biotech go through cost cuts is rarely a good sign that is a very low one-time charge ratio compared to annual savings.
Pharmacopeia is going to focus its efforts on its lead mid-stage candidate to treat high blood pressure and diabetic kidney disease called PS433540, and it will also focus on its early stage drugs to treat muscular atrophy, Psoriasis, and rheumatoid arthritis.
The company had a $125.8 million market cap as of the close and the company’s latest cash balance as of March 31, 2008 was $61.465 million. If you average out its last four quarters, the company has had an average operating loss of about $14.3 million. Like it or not, even in biotech stocks some companies have to make job cuts to survive.
As a reminder, its CEO left the company back in April.
Jon Ogg
May 30, 2008