Many companies are scrambling to find ways to cut costs and preserve cash before year's end. The latest to announce restructuring and layoffs is San Diego-based Vical. In order to preserve capital and focus on its most advanced development programs, the biotech will reduce its workforce by 29 employees, approximately 20 percent of its total staff. Vical will also close one of its research facilities. Although the company will incur Q4 charges of about $0.8 million for the layoffs and another $0.5 million in early 2009 for the facility closure, this will reduce future net losses and cash burn by about $4 million a year, according to the company's statement.
"Vical is fortunate to have sufficient capital for its near-term needs," said Vijay Samant, Vical's President and CEO, "but in the current economic climate, we needed to reduce spending and focus our efforts on advancing our two late-stage product development programs toward the achievement of key milestones."
According to an RTTNews report, Vical's Q3 earnings did not meet analysts' expectations. On average, analysts expected the company to narrow its losses over last year by $0.03, but Q3 net losses remained stagnate at $0.24 per share. Despite doubling revenue, Vical also failed to meet those expectations. Earnings for the Q3 2008 were $0.8 million, compared with $0.4 million during 2007's Q3. Wall Street analysts survey by RTTNews expected revenues of $2.46 million.
- read Vical's release
- check Vical's Q3 financial report
- take a look at the Top 5 layoffs of 2008