The new measure will be implemented throughout the fiscal third quarter and it is expected to be completed by the end of the year, the company said Tuesday.
The pharmaceutical company predicts the job cuts will cost around $18 million, mostly due to severance pay and other termination expenses. The costs also include about $3.5 million in non-cash stock-based compensations.
Shares of Intercept Pharmaceuticals were down 10.06% to $44.86 in trading Tuesday.
The company's move to cut jobs came two months after receiving a Complete Response Letter from the U.S. Food and Drug Administration, declining to clear for marketing the company's new-drug-application obeticholic acid for the treatment of liver fibrosis due to nonalcoholic steatohepatitis (“NASH”). Intercept Pharmaceuticals' stock that day declined by 37%.
The company posted encouraging second-quarter results earlier this month, reporting revenue of $77.2 million, an increase from $65.9 million in the prior-year quarter.
"I am encouraged by the outpouring of support we have received from the liver community in recent weeks and we remain committed to our goal of bringing the first therapy to market for patients with this serious condition," said Dr. Mark Pruzanski, president and chief executive officer of Intercept Pharmaceuticals, in a statement.
"Our PBC business achieved its highest quarterly net sales to date in the second quarter," said Pruzanski. "We plan to continue to invest in our growing PBC business."