AVI Biopharma Axes 28% of Workforce, After Missing Out on Flu Contract
AVI Biopharma has made some significant job cuts in Washington and Oregon after missing out on a potentially huge federal contract to make an RNA-based treatment against pandemic flu.
The Bothell, WA-based company (NASDAQ: AVII) is cutting the jobs of about 35 of its 125 employees—28 percent of the workforce—according to CEO Chris Garabedian. The company initially announced the job cuts at the bottom of a press release on Friday, without providing further explanation. The cuts will come from AVI’s Seattle-area operations, as well as its operations in Corvallis, OR, Garabedian says.
AVI Biopharma has sought to reinvent itself this year under the new CEO, who has brought in a new management team that has focused on its lead drug candidate for Duchenne Muscular Dystrophy (DMD), as well as biodefense programs to treat the deadly Ebola and Marburg viruses. But the company fell short in its bid to secure a long-term contract to make drugs against pandemic flu, which could have been worth as much as $500 million. Plus, AVI recently disclosed it was unable to overturn a European patent claim by Netherlands-based Prosensa, which claims it owns some intellectual property in AVI’s lead muscular dystrophy program.
“With our stock price at 52-week lows, and the recent disappointing news of not getting the flu contract, combined with Prosensa’s success in defending their patent in Europe related to Exon 51 (our lead program), we felt it was important to reprioritize / refocus on the primary value-driving programs of DMD, Ebola, and Marburg,” Garabedian said in an e-mail today.
AVI stock climbed 2 cents today to 73 cents a share, giving it a market valuation of just under $100 million. The company said in its most recent quarterly report that it expects to burn through about $30 million to $35 million of cash in 2011. AVI reported it had $46.3 million left in the bank at the end of September, in its most recent audited quarterly statement.