Realignment will focus on immunology and partnering development.
ZymoGenetics is reducing its workforce by approximately 32%, or 161 employees. The company is also reorganizing its operations to focus resources on assets with the potential to generate the greatest value for shareholders. The company expects to realize an annual reduction in operating expenses of approximately $30 million beginning in the third quarter.
ZymoGenetics will continue to build the market for its approved product, Recothrom Thrombin and continue to pursue R&D of biologics. The firm will discontinue ongoing research activities in oncology and focus future efforts in immunology. Collaborative transactions will receive greater emphasis to facilitate the development and commercialization of the company’s product candidates, while retaining significant rights to participate in downstream value generation.
The recently announced transaction with Bristol-Myers Squibb for Phase Ib PEG-Interferon lambda serves as a model for the company’s development strategy. ZymoGenetics received $85 million up front and $20 million as a license fee and could make about $1 billion in milestones.
With this new partnering strategy, ZymoGenetics is reducing its internal product development infrastructure and will pursue increased outsourcing. Headcount has been reduced in most areas of the company, with the greatest impact coming in research, manufacturing, and other development-related functions as well as administrative departments.
The company will record a charge in the second quarter of approximately $8.5 million for severance and other costs related to the workforce reduction.