Shares of Immunicon (IMMC) were among the worst-performing health-related stocks Monday, falling 7% after the company laid out plans to slash 25% of its workforce.
The company, which makes diagnostic and life-science research products, said the job cuts are being made to "align staff levels and other expenses with its current commercialization strategy and expectations for near-term revenue growth." Most of the cuts will occur in research and development, operations and certain support function, the company said. Immunicon expects to take a third-quarter charge of up to $1 million for severance and other costs related to the staff reductions.
Looking ahead, the company said that it continues to expect a 2005 cash burn of $30 million to $32 million. Immunicon expects its cost-reduction plan to mitigate its cash burn during 2006. As of July 31, 2005, the company had cash, cash equivalents and investments of $54.7 million. Shares were trading down 31 cents to $3.90.
Nutrition 21 (NXXI) rose 19% after the Food and Drug Administration approved a petition filed by the company to make a health claim about chromium picolinate and the risk of type-2 diabetes and insulin resistance. Specifically, the ruling allows the nutrition bioscience company to refer to chromium picolinate as a safe nutritional supplement that may reduce the risk of insulin resistance and type-2 diabetes. According to the FDA letter to the company, "One small study suggests that chromium picolinate may reduce the risk of insulin resistance, and therefore possibly may reduce the risk of type-2 diabetes. FDA concludes, however, that the existence of such a relationship between chromium picolinate and either insulin resistance or type-2 diabetes is highly uncertain." Nutrition 21 said the FDA declined to permit other claims proposed by the company. Shares were trading up 17 cents to $1.07.