VAXGEN CUTTING HALF ITS WORK FORCE AFTER CONTRACT CANCELLATION
VaxGen announced that it will cut 51 percent of its work force as part of restructuring efforts, following the federal government's unilateral cancellation of what would have been an $877.5 million contract to develop a next-generation anthrax vaccine.
The company said it will reduce its monthly expenditures by half, to less than $3 million, while it "actively pursu[es] avenues to enhance shareholder value through a strategic transaction." The company said it will incur a one-time cash charge of about $3 million due to the layoffs.
Lance Gordon, VaxGen's president, CEO and executive director, has resigned, but will remain an adviser to the company. The company's board of directors has unanimously appointed James Panek, the executive vice president, to be the new president and CEO and to fill the board vacancy left by Gordon.
"In addition to the $96.6 million in cash, cash equivalents and short-term securities that VaxGen held as of Dec. 31, 2006, the company has a number of significant assets of potential value to an acquirer or merger partner," said Randall Caudill, VaxGen's chairman of the board. "We are already in early stage discussions with several potential strategic partners and intend to aggressively pursue our opportunities to develop and realize the full value of all our capabilities and assets."