Biotech Dendreon has announced a company restructuring that includes cutting employment from 2,000 at its peak to approximately 820.
John H. Johnson, chairman, president and chief executive officer of Dendreon, said, "Accelerating the path to profitability has been a top priority for Dendreon. Consistent with that goal, we are restructuring the company and implementing additional cost reductions to enable Dendreon to succeed as a leaner, more nimble biotechnology company focused in immuno-oncology. Our plan enables us to slow our cash burn and be better positioned to achieve profitability while continuing to make strategic investments in manufacturing automation, select European initiatives and ongoing clinical development programs, including our combination and sequencing studies."
Dendreon's restructuring and cost reduction plan will remove more than $125 million in cash operating expenses from the company's 2013 run rate, representing a reduction of approximately 20%. These reductions will come from all expense categories. Cost of goods sold (COGS) expenses are expected to decline by approximately $30 million.
Dendreon will implement the plan immediately and expects net benefits will begin to be realized as early as the first quarter of 2014.