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AxCell Slashes 75 Percent of Workforce as Cytogen Restructures Unit

NEW YORK, Sept. 17 - AxCell Biosciences today said it has laid off three out of four employees and suspended "certain projects" as its parent, Cytogen, tries to cut costs and focus more on its core R&D.

 

Cytogen said AxCell will continue to develop its signal-transduction pathway database for clinical research and functional proteomics.

 

Though it did not say what "certain projects" were set for termination, AxCell stressed it will "continue to support  key research projects" in the "later stages of development," and those deals that involve "the most productive research collaborations."

 

Company officials were not immediately available to elaborate.

 

Cytogen, which said the restructuring stands to save it roughly $1.4 million in operating expenses per year beginning in the fourth quarter, hinted at AxCell's future last May when it said it was "reviewing strategic alternatives" for the unit.

 

Last month, Cytogen received a deficiency letter from the Nasdaq exchange warning that its stock was in jeopardy of being delisted from the exchange for being below $1 for 30 consecutive trading days.

  

By Nasdaq rules, if a company's stock closes below the $1 minimum for more than 30 consecutive trading days it is given 90 days to shape up or face getting booted off the exchange. If the company manages to bring its share price above that low water mark during that period for at least 10 consecutive trading days it's off the hook.

 

Cytogen shares last traded over $1 on July 11, and the stock has not closed above $1 since July 1. The company has until Nov. 12 to comply with Nasdaq requirements.

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