Affymax Cuts Jobs, Mulls Options after Recall
PALO ALTO, Calif. (AP) — Affymax Inc. shares tumbled in after-hours trading Monday after the biopharmaceutical company said it will cut 75 percent of its workforce following the recall of an anemia drug that caused severe allergic reactions and deaths among some users.
It is also considering further cuts, a possible sale or bankruptcy protection for the company.
The company and its partner, Takeda Pharmaceutical Co., said in February that of the 25,000 people who took its drug Omontys, about 50 reported severe allergic reactions and five died. The serious hypersensitivity reactions happened within 30 minutes of the drug being administered for the first time.
Affymax said it will lay off 230 employees to focus the company's resources on the ongoing product investigation. The cuts include jobs in its commercial and medical affairs field organizations, as well as other officers and employees.
CEO John Orwin said the decision was extremely difficult but using the company's limited resources for the product investigation is its top priority.
Affymax also announced that it will hire a bank to evaluate strategic alternatives, including a possible sale or merger. The company said it is considering all its alternatives, including further restructuring, winding down operations and bankruptcy proceedings.
Shares of the Palo Alto, Calif. company dropped $1.56, or 53.4 percent, to $1.36 in after-hours trading. The stock had already lost more than 80 percent of its value since the recall announcement last month.