Cell Genesys cuts Q1 loss as it winds downSan Francisco Business Times
Cell Genesys Inc. on Thursday reported a first quarter loss of $8.7 million, or 10 cents a share, narrowed from a loss in the same period last year of $22.6 million, or 29 cents a share.
South San Francisco-based Cell Genesys (NASDAQ:CEGE) said the decreased loss was primarily the result of a reduced level of operations through its restructuring plan.
The company said it continued to explore strategic alternatives, including merger with or acquisition by another company, additional restructuring, repurchase of additional amounts of convertible notes or allocation of its remaining resources toward other biopharmaceutical product areas.
Cell Genesys engaged Lazard Freres & Co LLC in connection with the evaluation of strategic alternatives.
The company already cut about 95 percent of its staff, from 290 persons to 16, by eliminating all research and development, manufacturing, clinical and regulatory activities.
The company said it expects to cut more during the next few months as additional activities are phased out or outsourced.
All major facility leases were also terminated at its head office and Hayward manufacturing facility.
In the first quarter a collaborative agreement with Takeda Pharmaceutical Co. Ltd. for GVAX immunotherapy for prostate cancer came to an end, and Cell Genesys recognized $600,000 in reimbursement revenue from Takeda.
License agreements that were terminated included those relating to the development and commercialization of oncolytic therapies with Novartis Pharma AG and certain affiliates as well as a gene activation technology license agreement with sanofi-Aventis which resulted in recognition of $100,000 in revenue.
The company recorded a restructuring charge of $2.6 million in the quarter, including $2.8 million for workforce reduction initiatives, and $3.9 million for lease termination costs partially offset by a $4.1 million non-cash gain from recognizing the deferred rent related to terminated operating leases.
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