-A Potential DKK 35-40MM in Annual Cost Savings-
-LCP-Tacro™ MAA Submission Expected Mid-2012-
Report is Available for Download at: www.lifesciadvisors.com/clients/veloxis
Today, Veloxis Pharmaceuticals (OMX: VELO) issued a press release announcing a restructuring of the Company, which is designed to support and strengthen the strategic focus on LCP-Tacro™. LCP-Tacro™ is Veloxis’ lead drug candidate for the prevention of organ transplant rejection, which is currently in its second pivotal Phase 3 clinical trial to treat patients that have undergone kidney transplantation.
The purpose of the corporate restructuring announced earlier today is to fully focus all of the Company’s resources on the completion of clinical development and future commercialization of LCP-Tacro™. For some time now, the major focus of the Company has been on completing development of LCP-Tacro™ and bringing the candidate through to commercialization. Therefore, we view this development as positive as the Company and management will now be able to focus on the lead asset and primary value driver for the Company while pooling resources and maintain a lean operating infrastructure. We believe this reflects growing confidence of the management team in LCP-Tacro™ as they are effectively doubling-down on the Company’s lead clinical program.
What Changes Associated with the Restructuring will Occur? First and foremost, the Company has mentioned that all other pipeline activities (including preclinical programs) will be discontinued until further notice. Veloxis plans to reduce 40-50% of the staff, which would equate to a total headcount reduction from 60 employees to 30-35 employees. The Company estimates that this reduction will result in an annual cost savings of DKK 35-40MM beginning in 2013. As the cost savings will be realized starting the beginning of 2013, we report that the Company’s guidance for 2012 remains in place.