Certain staffers at QLT (TSX:QLT) woke up to a lump of coal in their stocking today, but they probably saw it coming.
The Vancouver-based biotech today announced that, following the sale of Visudyne to Valeant Pharmaceuticals, it will cut its workforce by 42%. The company said those affected will be out in the first half of next year.
Chairman Jason Aryeh broke the bad news: “QLT’s board of directors wishes to sincerely thank all of our departing employees for their dedicated and loyal service to the company. Each of their contributions has been instrumental to our consolidation of development activities and transition of Visudyne to Valeant,” he said. “QLT’s remaining 38 employees are focused on the clinical development of our very promising synthetic oral retinoid program, while the board continues to acutely focus on delivering value to shareholders.”
QLT says it expects to record a restructuring charge of approximately $2.0-million, which will result in a $3.8-million reduction in annualized expenses.
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In September, Valeant paid $62.5 million to acquire the U.S. rights to Visudyne, a treatment for a common form of age-related blindness. The incentive-laden deal could see Valeant could pay up to an additional $20 million.
Like many biotech upstarts, QLT has seen its share of highs and lows. Founded in 1981 as Quadra Logic Technologies, the company went public in 1986 at $2.50 per share. In 2000, the year QLT received FDA approval for macular degeneration treatment Visudyne, the company’s shares soared to over $100 a share. But things came crashing back to earth after Visudyne brought in less revenue than anticipated, and shares of QLT fell to just over the $2 mark in 2009, before a modest rebound. The treatment has has remained a disappointment, numbers-wise; Visudyne sales for the first quarter of 2012 were $22.5-million, an increase of just 3.1% from the first quarter of 2011.
At press time, shares of QLT on the TSX were down .5% to $7.83.