XenoPort Restructures to Focus on Key Programs; Includes An Overall Reduction of 50% of XenoPort's Workforce
SANTA CLARA, Calif.--(BUSINESS WIRE)--XenoPort, Inc. (Nasdaq:XNPT) announced today a restructuring that includes an overall reduction in its workforce of approximately 50%. The restructuring is designed to focus the Company's resources on advancement of its later-stage product candidates. On February 17, 2010, the U.S. Food and Drug Administration (FDA) issued a Complete Response letter regarding the new drug application for HorizantTM (gabapentin enacarbil) Extended-Release Tablets, an investigational, non-dopaminergic treatment for moderate-to-severe primary restless legs syndrome (RLS).As a result of the reduction in workforce, the Company estimates that its annual cash expenses will be reduced by approximately $15.6 million, primarily related to a reduction in compensation and benefit expenses. The Company expects to incur cash expenditures in the first half of 2010 of up to $4.2 million related to the restructuring, which will partially offset the savings in 2010. The Company also expects to incur additional non-cash expenses as a result of the restructuring.
"The unexpected setback in the approval of Horizant has forced us to conduct a thorough review of our operating plans. We have made the difficult decision to restructure the Company to prioritize later-stage development activity and eliminate our discovery research efforts," said Ronald W. Barrett, Ph.D., XenoPort's chief executive officer. "We are fortunate to have a number of product candidates in clinical development as well as several other advanced preclinical compounds that can be developed. We believe that maximum value will be created for our stockholders over the next several years by reducing our overall spending while focusing on helping our partners gain approval of Horizant in the U.S. and XP13512 in Japan, completing our ongoing Phase 2b trial of arbaclofen placarbil (AP) in gastroesophageal reflux disease (GERD) patients and initiating a Phase 2 clinical trial of XP21279 in patients with Parkinson's disease."
XenoPort, Inc. is a biopharmaceutical company focused on developing a portfolio of internally discovered product candidates that utilize the body's natural nutrient transport mechanisms to improve the therapeutic benefits of existing drugs. XenoPort is collaborating with Astellas Pharma Inc. and GlaxoSmithKline (GSK) to develop and commercialize XP13512 (known as Horizant in the United States). XenoPort's product candidates are being studied for the potential treatment of restless legs syndrome, GERD, migraine headaches, neuropathic pain, spasticity and Parkinson's disease.
This press release contains "forward-looking" statements, including, without limitation, all statements related to the approval of Horizant/XP13512 for the treatment of RLS; XenoPort's and its partners' future clinical development of Horizant/XP13512; XenoPort's future clinical development of AP and XP21279; the therapeutic and commercial potential of XenoPort's product candidates; the creation of stockholder value; and anticipated expense savings and cash and non-cash expenses from restructuring activities. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as "believe," "expect," "potential," "will" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon XenoPort's current expectations. Forward-looking statements involve risks and uncertainties. XenoPort's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to XenoPort's ability to implement the restructuring as currently anticipated; the impact of the workforce reduction on XenoPort's business; unanticipated charges not currently contemplated that may occur as a result of the restructuring; and the following risk factors discussed under the heading "Risk Factors" in XenoPort's Annual Report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission on February 26, 2010: risks related to the uncertainty of the FDA approval process and other regulatory requirements; the uncertain results and timing of clinical trials; XenoPort's or its partners' ability to successfully conduct clinical trials in the anticipated timeframes, or at all; XenoPort's dependence on its current and additional collaborative partners; and the uncertain therapeutic and commercial value of XenoPort's product candidates. XenoPort expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in XenoPort's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.