StemCells said today it will shrink its workforce by about 25% by January 31, 2016, as part of a restructuring that will include selling off assets and refocusing clinical efforts away from retinal disorders and toward chronic spinal cord injury (SCI).
The company has been working to develop its HuCNS-SC® (purified human neural stem cells) platform technology as a treatment for multiple disorders of the central nervous system.
StemCells has begun cutting 17 full-time employees from its workforce of 74, the company disclosed in a Form 8-K filing. The workforce had grown earlier this year from 69 full-time employees as of December 31, 2014, a figure disclosed by the company earlier this year in its Form 10-K annual filing.
StemCells estimated it will incur approximately $400,000 in restructuring charges during Q1 2016 through one-time employee termination costs, including severance and other benefits.
Overall, StemCells said it expects to generate approximately $20 million in cost savings over two years through the restructuring.
In addition to the job cuts, StemCells said it will launch ongoing efforts to monetize some technology assets, “which may include partnerships, strategic alliances, out-licenses of non-core intellectual property, and the pursuit of both non-dilutive and creative product-specific financing alternatives.”
The company will also immediately suspend its Phase II Radiant Study in geographic atrophy of age-related macular degeneration, including curtailing further patient enrollment and service agreements. Instead, StemCells said, it will seek a partner to fund continued development of its platform in retinal disorders.
StemCells restructured its operations a month after reporting promising six-month interim results for the first cohort in its Phase II Pathway™ Study in cervical SCI. Those results showed motor improvement in four of six patients as measured by gains in both strength and function, StemCells said November 18. StemCells also reported positive outcomes in an earlier Phase I/II study in thoracic SCI.
“Given the strength of our clinical findings for the safety and preliminary efficacy of our HuCNS-SC platform technology in treating chronic spinal cord injury, we have decided that now is the time to narrow our focus,” StemCells’ CEO Martin McGlynn said in a statement.
StemCells said it will expedite completion of the Pathway Study and launch a pivotal Phase III clinical trial in chronic SCI.
“Our hope is that by focusing now on our most advanced program, we will be paving the way to further address other disorders in the future,” McGlynn added.
Also in November, StemCells reported a third-quarter loss of $9.643 million, versus $2.757 million in Q3 2014—attributed to increased expenses for clinical studies, and manufacturing, quality control and process development activities.
[This story has been updated from an earlier version to include details of the workforce reduction as disclosed in a Form 8-K filing by StemCells Inc.]