BOTHELL
OncoGenex Pharmaceuticals halved its work force on the company’s first day of existence Thursday, Aug. 28, cutting 21 employees at its Bothell facility and leaving just seven employees there.
When the former Sonus Pharmaceuticals and OncoGenex Technologies announced their merger plans in May, a large layoff was not publicly mentioned. Scott Cormack, chief executive officer of the newly combined company, said that in the last three months, however, he carefully reviewed where the firm should focus its spending going forward.
Once that was decided, Cormack said it was preferable to make the major changes right away. Following a vote Tuesday by Sonus’ shareholders, the merger became official this week.
“It’s the right thing to do for investors and for the people here,” he said. “For us to walk in on Day 1 and to say here’s the plan, it settles the market and the staff.”
OncoGenex has a lead cancer drug candidate in phase 2 clinical trials and two candidates in phase 1 trials. Two others, still in the preclinical stage, were purchased just weeks ago from Bayer Healthcare. The goal is to move all of those forward, instead of spending resources developing other preclinical candidates, Cormack said.
That meant that many of the laboratory employees at the former Sonus’ facility in Bothell were not needed; those functions can be outsourced. Of the 26 people laid off Thursday, 21 were in Bothell, with the rest trimmed from OncoGenex’s Vancouver, B.C., offices.
Of the remaining 27 employees, seven are in Bothell and another seven are in Seattle, Cormack said. Employees working in that latter location will move to the Bothell office in the coming months.
While Cormack and other company officials will work mostly from Vancouver, Bothell officially is OncoGenex’s headquarters. Executives working there include the chief medical officer and the company’s regulatory head.
Last year, Sonus employed more than five dozen people in Bothell. But when its lead chemotherapy treatment failed in late-stage trials and its stock lost 80 percent of its value within one day, the company’s future was thrown into doubt.
As part of the $10 million merger, the former Sonus stock shares went through a 1-for-18 reverse stock split. That meant OncoGenex’s shares debuted on the Nasdaq market at $5. They lost 18 cents during Thursday’s trading, closing at $4.82.
The newly combined company has cash reserves that totaled $26 million as of June 30. That is enough to take OncoGenex through the end of 2009, Cormack said. “This gives us a very, very strong base to continue,” he said.
Eric Fetters writes for the Herald of Everett.
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