NEW YORK, April 11 - Deltagen today said it has shuttered nine "premises" and laid off approximately 50 of its staffers, or 25 percent of its workforce, as the company continues to find ways of cutting costs and staying solvent.
Deltagen said it will vacate nine "premises of excess space" and consolidate "all its primary activities" into its newly opened facility in Redwood City, Calif. The move is expected to save the company $8 million in 2004.
The reduction in head count, from 200 to 150 employees, was in the research and development and administrative functions.
"These actions are being implemented to ensure that Deltagen is optimally structured to drive revenues and satisfy our customers' needs in a cost-effective manner," said Joseph Limber, the firm's interim CEO. "We will work to expand our revenue base by taking full advantage of our portfolio of products that include biological models, drug interaction and metabolism technologies, and validated small molecule targets."
Deltagen, which has been besieged by economic hardships, managed last week to sell $10 million of its preferred stock in a private placement to existing institutional investors.
The same investors have committed to a bridge loan of $5 million, at an annual interest of 10 percent, that can be increased to $6 million.
The financing will enable Deltagen to expand its product range and start new marketing and sales initiatives, according to the company. It is subject to shareholder approval and the satisfaction of certain closing conditions. Deltagen's stockholders will also be asked to approve a reverse stock split.