|Exelixis CEO Michael Morrissey|
Cancer drugmakers often work to expand the labels for their marketed products by testing them in different types of the disease. But that doesn't always go so well, which can take a hefty toll on smaller companies, as San Francisco-based Exelixis now knows all too well.
On Monday, the biotech reported that its cabozantinib--marketed in the U.S. as Cometriq for a rare type of thyroid cancer--flopped in a comparison study with prednisone for castration-resistant prostate cancer, failing to show a statistically significant increase in overall survival. And 160 employees will pay the price.
Only 70 employees will make it out of the layoff sweep, with those job cuts allowing the company to double down on late-stage clinical trials of the drug in advanced liver cancer and a form of kidney cancer, Exelixis said.
"The workforce reduction we have announced today is necessary to significantly reduce our corporate operating expenses," CEO Michael Morrissey said in a statement, going on to thank his soon-to-be-departed employees for their commitment and their contributions to cancer patients.
But in the meantime, the company--which hauled in $11.5 million in the first half of this year--will have to cough up a one-time restructuring charge of between $6 million and $8 million, not to mention face an investor community that sank Exelixis shares by more than 50% in premarket trading before Tuesday's open.
That's a tall order for Exelixis, despite a top-line haul that nearly doubled in H1. The company's losses also mounted, swelling to $148 million in the first half of this year, up from $106.9 million in the same period a year ago.
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