Dendreon reduces work force by 15%
Seattle-based Dendreon on Thursday laid off 15 percent of its work force, or about 40 people, in an effort to cut back its spending. The layoffs, effective immediately...
Seattle Times business reporter
Seattle-based Dendreon on Thursday laid off 15 percent of its work force, or about 40 people, in an effort to cut back its spending.
The layoffs, effective immediately, were spread across all departments.
The biotech company decided to cut its work force following the decision last week by the U.S. Food and Drug Administration (FDA) to require more data about Dendreon's prostate-cancer drug Provenge.
The company, which previously employed 250, is looking for ways to reduce its spending, said spokeswoman Monique Greer.
"We needed to take prudent steps to conserve capital," she said.
Greer said she didn't know how much money the staff reduction would save the company. Last week, Dendreon reported that it spent $33 million in the three months ended March 31. It had $88.5 million in cash and equivalents remaining.
The company's chief financial officer, Gregory Schiffman, was not available for comment Thursday.
Dendreon was ramping up its work force in anticipation that the FDA would allow it to launch Provenge this year. It hired about 30 additional workers over the past year to support that effort.
The launch was sidelined last week when the FDA said it needed more clinical-trial results on Provenge, a decision that analysts say will likely delay the drug for up to three years.
Dendreon will have preliminary data from an ongoing study of Provenge sometime next year, but it won't have final data on that trial until 2010.
Following the FDA's decision, Schiffman told analysts that the company would be looking at all opportunities to reduce its cash burn.
Analyst Paul Latta of McAdams Wright Ragen in Seattle said the company should have raised more capital using a $200 million shelf offering that it filed in March.
Dendreon's CEO, Mitchell Gold, sold about 200,000 company shares for about $2.7 million right after Provenge was recommended for approval by an FDA advisory panel in late March.
Gold sold shares at $13.46 as the company's stock began a steady climb, reaching $25.25 in mid-April. Shares closed at $6.38 in trading Thursday, up 6.5 percent.
"The stock price went up and then the insider sold, but not the company," said Latta.
The last time Dendreon laid off workers was in January 2006, when it cut 34 positions, or 15 percent of its work force at the time. The positions were mostly in Dendreon's early-stage research and administration and were cut to focus resources on the commercialization of Provenge.
Kirsten Orsini-Meinhard: 206-464-2391 or email@example.com