Nexell to Transfer Business, Lay Off 66 of 100 Workers

Struggling Nexell Therapeutics Inc. said Tuesday that it will fire two-thirds of its work force and transfer rights to its cell-processing products to its biggest shareholder, Baxter International Inc.

The Irvine developer of cell therapies to treat cancer and other diseases said Baxter’s health care unit will obtain worldwide sales and marketing and distribution rights for Nexell’s flagship Isolex magnetic cell-selection system, cell culture and storage containers, and other products.

Terms of the deal were not announced. Nexell said it would take a one-time charge later this year partly for severance pay for 66 of its 100 workers, whom it expects to lay off by the end of the year.

Baxter, based in Deerfield, Ill., owns nearly 12 million shares, or about 38%, of Nexell, according to a document recently filed with the Securities and Exchange Commission.

Much of the Nexell’s technology comes from a former Baxter division it acquired in 1999. The deal, though, is not a prelude to a Baxter takeover, Nexell spokesman Tad Heitmann said. Nexell said it expects to get royalties on Baxter’s sales of the products.

Nexell’s restructuring will allow the company to cut distribution, marketing and sales expenses and focus on developing cancer vaccines and treatments for inherited blood disorder and such autoimmune diseases as multiple sclerosis, Heitmann said.

The company, which eliminated 25 jobs last fall, said it will close a sales office in Brussels. Baxter may hire some of the fired employees, Heitmann said.

Nexell has never made a profit. In the past five years, it has lost nearly $160 million, including a $6.1-million loss in the first quarter. Revenue was flat at $4.8 million.

Nexell, formerly known as VIMRx Pharmaceuticals Inc., moved to Orange County from Wilmington, Del., in May 1999. William A. Albright Jr., Nexell’s president since July, added the chief executive’s title three months ago.

Nexell stock dropped 35 cents Tuesday to close at $2.50 a share in Nasdaq trading. The firm’s shares have lost 85% of their value in the past 52 weeks.

Baxter closed at $49.31, down 7 cents a share.