Keryx Biopharmaceuticals (Nasdaq:KERX; LSE:KRX) announced yesterday that it is laying off 28 employees, or some 45% of its workforce, as part of a strategic reorganization it said was designed to cut costs and maintain focus on its leading products.

The Jerusalem-based company said that the remaining employees, including senior management, would take a 5-10% pay cut, and that the redundancies would affect operations both in Israel and the United States.

Keryx develops drugs that target protein kinases, which play a key role in the way cells communicate and are implicated in a wide range of diseases, including cancer and diabetes.

"The company has decided to take the steps necessary to conserve our cash resources, while focusing our efforts primarily on our two lead candidates, KRX-101 for the treatment of diabetic nephropathy, and KRX-123 for the treatment of hormone resistant prostate cancer," commented Keryx CEO Dr. Benjamin Corn.

The company's director of investor relations, Ron Bentsur, said that the company had decided to cut projects in their initial stages and that most of the job losses would be in these projects.

The announcement came together with publication of the company's second-quarter 2002 results. Keryx reported a net loss of 12 cents per share, as opposed to a loss of 17 cents per share in the corresponding quarter of last year.

The company reported cash reserves of $30 million and research and development expenses of $2.3 million.

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