NEW YORK, June 5 - Large Scale Biology said yesterday it has laid off 58 employees since January and has trimmed the salaries of the company's highest-paid executives in an effort to rein in cash burn by $10 million a year.
Blaming an "irrational" biotechnology market, LSBC president John Fowler said in a corporate conference call this morning that he would "not sleep well" until the company had established a three-year cushion of operating expenses.
"We wanted to shore up, pare back and focus on those areas with near-term promise," said Fowler. "We asked everyone to tighten their belts and prioritize."
The job cuts, which left Large Scale with 127 staffers, were made across the company's three national facilities: in Vacaville, Calif.; Germantown, Md.; and Owensboro, Ky.
Large Scale also said that roughly 28 of its highest-paid employees will incur 10-percent reductions in the cash-compensation portion of their salaries. The top three executives in the company will trim their take-home by 20 percent, Large Scale said.
Additionally, the company said that Leigh Anderson and father Norman Anderson have resigned. Larry Gill, a co-founder of the company with 15 years under his belt there, replaces the younger Anderson as chief scientific officer. Father and son will go on as consultants for Large Scale.
LSBC execs said that the company's work with a lymphoma vaccine, its protein manufacture technology, and its proteomics and full-length clone capabilities will not be affected by the cuts. "Those technologies are still vitally important to the strategy, and will be applied to our internal prospects as well as to the needs of prospective clients," said chief executive officer Robert Erwin.
Fowler also said that LSBC soon hoped to announce several "six-figure to seven-figure" deals, and had several partnership prospects in agbiotech and proteomics.
But Fowler and Erwin shied away from making any more specific revenue forecast, despite prodding from analysts.
Large Scale also announced a broad management-reporting restructuring. Specifically, "all major business units and functions" will now report to Fowler, and Chairman and CEO Robert Erwin will "provide overall direction for the company's product pipeline and technical strategy."
Fowler began the conference call with a bitter blast against the biotechnology finance market. "Right now, we're in irrational period," he said. "The industry prospects never been better, and the valuations have never been this irrationally negative."