Allozyne “Redistributes” Workforce After Scrapping Poniard Merger Plan

1/3/12Follow @xconomy

Seattle-based Allozyne has made a small set of job cuts after it was unable to pull the trigger on its plan to go public late last year, Xconomy has learned.

Allozyne has let go some of its scientific staff, according to a source close to the situation. When asked how many jobs were eliminated, and how many employees remain at Allozyne, CEO Meenu Chhabra said there was no downsizing but that “we redistributed functional areas.” That decision came days after Allozyne scrapped a plan to go public through a merger with San Francisco-based Poniard Pharmaceuticals. If the deal had gone through, privately held Allozyne would have gotten a NASDAQ listing that would have enabled it to raise more money from mutual funds, institutions, and hedge funds that only invest in public companies.

“We are gearing up for Phase 3 work and are redistributing the talent to focus on clinical development and regulatory tasks,” Chhabra said via e-mail. “That said, discovery and early stage activities are alive and well.”

She didn’t say exactly how many employees remain at Allozyne, but before Christmas, Chhabra said the company had about 20 employees.

Allozyne has spent about $50 million since its founding in 2005 and was down to its last $1.3 million in cash at the end of June, according to recent regulatory filings. But when Allozyne walked away from the Poniard merger, it raised a still-undisclosed amount of cash from Arch Venture Partners, MPM Capital, and OVP Venture Partners, Chhabra said in a Dec. 22 interview. The money will be used to help the company push ahead with a plan for 2012 to move its lead multiple sclerosis drug into the third and final phase of clinical trials normally required for FDA approval, Chhabra has said.

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  • R. Jones

    “Allozyne has let go some of its scientific staff, according to a source close to the situation.”

    “When asked how many jobs were eliminated, and how many employees remain at Allozyne, CEO Meenu Chhabra said there was no downsizing but that “we redistributed functional areas.”

    “She didn’t say exactly how many employees remain at Allozyne, but before Christmas, Chhabra said the company had about 20 employees.”

    It sounds like people were let go but it was not considered downsizing.

    Poniard saw the loss of 5 individuals that Xconomy has yet to mention. The CEO and four board members resigned as a result of the merger fiasco. Allozyne probably let a few lab techs go. It’s hard to know with the stealthy management and shotty journalism surrounding this story.

  • bayarea scientist

    I can confirm from reliable sources that at least two Allozyne employees were re-assigned to the unemployment office a few weeks ago. They have begun foraging for their next gig.

  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    R. Jones—I’m confident that several scientific staff were laid off at Allozyne, otherwise I wouldn’t have published the story. It’s only fair to allow management to have an opportunity to comment and clarify, however vague or confusing the comments may be.

    Bayarea Scientist—thanks for the note. And please keep the tips about this kind of news coming to me at ltimmerman@xconomy.com. That’s often where the news gathering/verification process gets started, so please send me the tips, otherwise they might not get reported. If you need to remain anonymous for a good reason, let me know, there’s usually another way for me to verify the information.

  • Former Allozyne Scientist

    As a former employee of Allozyne, I know for a fact that 2-3 other employees were laid off in May and several Others before that time, so this was not the first round of lay offs. I’m surprised that Mrs. Chhabra was able to go from pharmaceutical sales in doctors offices to the CEO of this company. I pity the investors and their losses with this soon to be dead company.

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  • JA

    I have watched Allozyne since their founding – their technology is great and they have accomplished an awful lot in a short time.