Neopharm to lose 42% of staff in cost-cut plan

Neopharm has announced a strategic reorganization of its operations involving the loss of 15 positions, a 42% reduction in its workforce, which management hopes will allow the US cancer specialist to focus on advancing its pipeline. The costs associated with termination benefits from its workforce cutbacks are estimated to be $600,000, while reductions in other general and administrative costs are projected to result in more than $2.0 million in savings over the prior year.

Total cost cuts implemented and planned are expected to result in annualized cash consumption of under $7.0 million before project costs and, depending on the strategic decisions the company makes regarding investments in its product portfolio, these changes are intended to reduce its cash burn until 2008 and allow the firm to continue operations into 2009 before requiring more funds.