In May 2008, Pharmacopeia reduced its workforce by approximately 15% through attrition and termination of positions. With these two reductions, the company will have reduced its workforce in excess of 50% from previous levels. The company will continue to fulfill its contractual commitments to its corporate partners.
As a result of its reductions in operating expenditures, Pharmacopeia expects the cash burn for the quarter ending December 31, 2008 to be approximately $10 million, exclusive of severance related costs. The company expects its quarterly burn to be less than $10 million in 2009.
Pharmacopeia plans to begin a Phase II clinical trial for PS433540, focusing on the indication of diabetic nephropathy. The company is also considering opportunities to partner the development of PS433540 for various indications and is evaluating various strategic initiatives intended to further the development of the company’s business and enhance shareholder value.
In the third quarter of 2008, Pharmacopeia expects to record a charge of approximately $3 million in connection with the severance provided to employees directly affected by the latest reduction in staffing.
Joseph Mollica, interim president and CEO of Pharmacopeia, said: “This decision is extremely difficult but necessary as it will allow us to better focus on our strategic initiatives.”