Sonus cuts back after failed clinical test

Published 9:43 pm Wednesday, November 7, 2007

BOTHELL — Sonus Pharmaceuticals Inc. is cutting its staff by 16 people, or about 25 percent, in a move to cut costs after the biotechnology firm’s lead drug candidate failed a pivotal clinical test.

The Bothell-based company disclosed in a regulatory filing Wednesday that it implemented the layoffs a week ago. The workers’ official last day will be Nov. 30.

After the cuts, Sonus will have 48 employees.

Among those being laid off are the company’s principal accounting officer. His duties will be assumed by Sonus’ chief financial officer.

“These steps were taken in order to conserve cash and preserve the critical capabilities necessary to pursue the highest priority development programs,” Sonus stated in the filing.

Sonus executives could not be reached for comment Wednesday.

The workforce reduction will cost the company about $1.2 million in one-time termination benefits, including severance pay and medical insurance expenses.

Michael Martino, Sonus’ chief executive, announced Sept. 24 that its once-promising cancer drug, Tocosol paclitaxel, failed in late-stage human tests. The company’s shares lost 84 percent of their value that day.

Sonus indicated Wednesday that it has received notice from the Nasdaq market that its stock will be delisted if it does not rise above $1 per share again before May 2008. The company’s shares lost another 4 percent to close the day at 48 cents.

The biotech firm has hired a strategic adviser to help identify and pursue options for the company, which could include a buyout. On Monday, the company is scheduled to announce its third-quarter results, at which time Martino may comment further on Sonus’ future.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com