Updated from 1:12 p.m. EST
La Jolla Pharmaceutical
Wednesday announced deep job cuts following news the Food and Drug Administration is unlikely to give the biotech accelerated approval for its Lupus kidney disease drug.
Under its restructuring plan announced today, the company says it will lay off 40% of its workforce, leaving a staff of 95. Termination costs will be about $1.5 million. About $1.3 million of the costs will be recorded in the first quarter and the remainder in the second quarter.
Riquent, still in clinical trials, is the company's experimental treatment for the Lupus renal disease, the main cause of sickness and death in patients with Lupus. Lupus is a chronic condition in which the immune system attacks the body's own tissue causing potentially fatal organ damage.
In order to continue operations into the first quarter of 2006, La Jolla previously announced it would need to take significant cost-cutting measures if the company didn't raise additional funds or receive accelerated approval for Riquent.
The San Diego, Calif.-based company expects to continue its clinical trials of Riquent without any additional patient enrollment or site expansion. "There can be no assurance, however, that we will have the necessary resources to complete any additional trial or that any additional trial will sufficiently demonstrate the safety and efficacy of Riquent," the company said in a release.
Shares rose one cent, or 1.6%, to 64 cents, erasing an early decline. More than one million shares changed hands -- double the average daily volume.