Five Prime announces corporate restructuring, cutting 20% of headcount

Five Prime Therapeutics announced a corporate restructuring to focus resources on its development pipeline, comprising five clinical-stage cancer programs in various solid tumor types and addressing multiple cell types in the tumor microenvironment. The company is eliminating 41 current positions, representing approximately 20% of its current headcount, and will take a disciplined approach to replacing and adding headcount. The positions eliminated are primarily in areas relating to research, pathology and manufacturing. The company expects that the restructuring and other cost-saving efforts will result in a $10M reduction in net cash used for operating activities during fiscal year 2019 as compared to 2018, with additional expected savings in 2020 and beyond due to lower ongoing personnel expense. Five Prime estimates that it will incur approximately $2 million of pre-tax charges for severance and other costs related to the restructuring, primarily during the first quarter of 2019. The company’s financial guidance that it anticipates ending 2019 with $148 to $153 million in cash, cash equivalents and marketable securities reflects the expected reduction in the company’s operating expenses due to the elimination of positions. The company has no debt and ended 2018 with $270 million in cash, cash equivalents and marketable securities and believes this cash is sufficient to fund programs through multiple data readouts.
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