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VaxGen is reducing its workforce from 61 to 27 employees, which thecompany expects will lower its monthly cash expenditures used in operatingactivities to $1.4 million. The company will incur a restructuring charge ofapproximately $1.1 million in connection with this action. The terminationsinclude executive officer Lance Ignon, Vice President of Corporate Affairs.
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This is VaxGen's third restructuring since the U.S. Department of Healthand Human Services (HHS) cancelled the company's contract to provide a modernanthrax vaccine for civilian biodefense in December 2006.
"Throughout this year we have retained only those resources thatmanagement felt could build value for our shareholders, either because theyenhanced our ability to complete a strategic transaction or they were requiredto meet essential business objectives," said James P. Panek, VaxGen'sPresident and CEO. "Based on our understanding of the nature and structure ofsuch potential transactions, we are now able to take this furtherrestructuring action. We remain optimistic about completing a strategictransaction and are in various stages of discussions with a variety ofcompanies."
VaxGen has retained key resources necessary to support its pursuit ofstrategic transactions, including key scientific personnel for technical duediligence. The company has also retained people associated with the company'sfinancial reporting obligations to the Securities and Exchange Commission."These are not easy decisions, especially when you are talking about lettinggo of many talented and dedicated employees," Mr. Panek said. "In particular,Lance Ignon has tirelessly and competently fulfilled a variety ofresponsibilities during his more than seven years of service to VaxGen.Nonetheless, these staffing decisions are appropriate given the opportunitieswe are pursuing and the obligation we have to our shareholders."
About VaxGen
VaxGen is a biopharmaceutical company based in South San Francisco,California. For more information, please visit the company's web site athttp://www.vaxgen.com.
Note: This press release contains "forward-looking statements" within themeaning of the federal securities laws. These forward-looking statementsinclude without limitation, statements regarding the company's ability toreduce monthly cash expenditures used in operating activities and thepossibility of selling or merging the company's remaining assets. Thesestatements are subject to risks and uncertainties that could cause actualresults and events to differ materially from those anticipated. Readers arecautioned not to place undue reliance on these forward-looking statements thatspeak only as of the date of this release. VaxGen undertakes no obligation toupdate publicly any forward-looking statements to reflect new information,events, or circumstances after the date of this release except as required bylaw.
SOURCE VaxGen, Inc.
