NEW YORK (AP) - Biotechnology company Novacea Inc. said Monday it will slash its work force, one month after partner Schering-Plough Corp. pulled out of a development agreement for the failed prostate cancer drug candidate Asentar.
The company said it expects the job cut process to last about two months, reducing the work force to 15 employees from about 37 currently.
The move comes as the company continues exploring its options in the wake of Schering-Plough's departure from the partnership after Asentar failed in a late-stage study. The study was cut short after the companies found that patients taking the drug died more often than those taking standard treatment.
Novacea said it will provide severance assistance to the employees and expects cash payments to reach $800,000.
'While we believe the company is in a good financial position, the work force reduction was a very difficult decision for the management team, and we extend our sincere gratitude and appreciation to all of the affected employees,' said Chairman and Chief Executive John P. Walker.
Meanwhile, the company said its first-quarter loss narrowed to $1.2 million, or 5 cents per share, compared with a loss of $10.6 million, or 46 cents per share, during the same period a year ago. Novacea had revenue of $6.8 million from its now defunct collaboration with Schering-Plough.
Novacea expects to gain $52.4 million in deferred collaboration payments from Schering-Plough 2008.
Shares of Novacea fell 11 cents, or 3.4 percent, to $3.04 in after-hours trading after rising a penny to close at $3.15 during the regular trading session.
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