CoCensys to Restructure, Cut 34 Jobs
CoCensys Inc., the struggling Irvine biomedical company, said Tuesday that it will undertake a corporate restructuring that, among other things, will cost 34 Orange County workers their jobs.
The news comes on the heels of another quarterly loss for the company, this time amounting to $2.8 million.
The job cuts represent nearly 40% of the company’s staff of 91 employees. CoCensys will retain its research and discovery staff but is eliminating most development and administrative positions, said Richard Nichols, the company’s president and chief executive.
“These were all very capable people that we let go, and it’s unfortunate that we had to do this,” Nichols said.
The company was founded in 1989 and develops treatments for brain and nervous system disorders. It has spent more than $174 million developing drugs but so far has yet to turn a profit.
CoCensys recently warned investors that it still faces years of losses if its research is to continue. If the company isn’t able to obtain additional funding, it may be forced to cease operations.
“We do not yet have a product on the market,” said Robert Holeman, vice president and general counsel. “During this period while our drugs are potential drugs, it’s foreseeable that we would continue to experience losses.”
The announcement of the layoffs and first-quarter loss came after the stock market closed Tuesday. CoCensys shares were unchanged, at 88 cents.
Nichols said he expects the restructuring to save the company more than $3.5 million this year in labor and facility costs. CoCensys occupies two offices in the Irvine Spectrum Center but expects to consolidate its operations into one building and sublease the other.
CoCensys is facing the possible delisting of its stock because its price has fallen below the Nasdaq’s minimum bid of $1 a share.
Earlier this month, the Nasdaq stock market halted trading of the company’s stock for several days to investigate a report that 100 CoCensys shares had sold on March 31 at 6 cents a share, far less than the market price. The company said at the time that it knew of no reason for the unusual trade.
