30% headcount reduction - Orexo restructures
Stockholm – Swedish drug delivery specialist Orexo AB has announced the intention to cut its headcount by 30% in order to reduce the company's burn rate. The personnel reduction by 35 people is expected to lower the costs by a total of SEK30 million annually. Negotiations with trade union representatives will commence immediately. The reduction in personnel is expected to be completed during the second quarter of 2012. The company will focus all of its efforts on the three development programmes OX219, OX51 and OX27. The two last are fast-acting sublingual non-specified formulations of existing treatments in phase II to treat pain or cancer respectively. OX219 is a new, patentable drug in phase III for the treatment of various forms of opioid dependence. The active substance in OX219 isbuprenorphine. Orexo has already brought the fast-acting fentanyl Abstral to market. The compound treats cancer pain and is licensed to ProStrakan plc. Although the Abstral revenue share rose by more than 50% up to SEK70.5 million, the company faces losses of almost SEK400 million after tax, approximately four times the amount in 2010. At the end of 2011, Orexo had SEK247 million in cash. Last year, pharma partner Jannsen Pharmaceuticals Inc. cancelled a project, forcing Orexo to give up the projects OX-CLI and OX-ESI.