SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Five Prime Therapeutics, Inc. (NASDAQ: FPRX), a clinical-stage biotechnology company focused on discovering and developing immune modulators and precision therapies for solid tumor cancers, announced today a corporate restructuring to extend the company’s cash runway without impacting or delaying the data timelines of its clinical programs. The company will retain a small research group focused on advancing three wholly-owned, late-stage research assets and will increasingly rely on outsourcing and contracted capabilities.
“My immediate focus as CEO has been to conduct a review of Five Prime’s operations with the goal of ensuring long-term sustainability and value creation,” said William Ringo, Chairman and Interim Chief Executive Officer of Five Prime Therapeutics. “This restructuring provides the cash runway to prioritize future pipeline investments based on clinical data readouts in 2020. It also allows us to evaluate long-term strategies to grow our pipeline. We acknowledge this decision impacts many talented employees who helped build Five Prime into a clinical-stage company. We are grateful for their contributions and hold them in high regard.”
The company will eliminate approximately 70 positions across all functions. Seventy percent of these positions will be eliminated by the end of 2019, with the remainder occurring in 2020. The company is also initiating activities to reduce its corporate facilities footprint by either subletting a significant portion of its leased space or subletting the entirety of its building and relocating to smaller facilities. The company believes these actions will improve its potential to bring value to patients, employees and shareholders.
The company expects that the restructuring, planned facility expense reduction and other cost-saving efforts will result in approximately $20 million in annualized cost savings, extending the company’s cash runway. Five Prime estimates that it will incur approximately $3 million of pre-tax charges for severance and other costs related to the restructuring, primarily in 2019.
The company is reaffirming its financial guidance and anticipates ending 2019 with $148 to $153 million in cash, cash equivalents and marketable securities.
About Five Prime
Five Prime Therapeutics, Inc. discovers and develops innovative protein therapeutics to improve the lives of patients with serious diseases. Five Prime’s product candidates have innovative mechanisms of action and address patient populations in need of better therapies. Five Prime has five programs in various stages of clinical development, two of which are partnered with Bristol-Myers Squibb. The company focuses on researching and developing immuno-oncology and targeted cancer therapies paired with companion diagnostics to identify patients who are most likely to benefit from treatment with Five Prime’s product candidates. Five Prime has entered into strategic collaborations with leading global pharmaceutical companies and has promising product candidates in clinical and preclinical development. For more information, please visit www.fiveprime.com or follow us on LinkedIn, Twitter and Facebook.
Cautionary Note on Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on Five Prime's expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties. Forward-looking statements contained in this press release include statements regarding (i) the effect the restructuring will have on Five Prime’s expected cash runway; (ii) the timing of the presentation of data for Five Prime’s product candidates; (iii) the timing of progress and scope of clinical trials for Five Prime’s product candidates; (iv) the scope and timing of the restructuring; (v) plans to reduce Five Prime’s corporate facilities footprint; (vi) the expected annual cost savings associated with the restructuring, planned facility expense reductions and the company’s other cost-saving efforts; (vii) the timing and scope of expected pre-tax charges for severance and other costs related to the restructuring; and (viii) the amount of Five Prime’s cash, cash equivalents and marketable securities at the end of 2019. Actual results may differ materially from these forward-looking statements. Factors that may cause actual results to differ from those expressed or implied in the forward-looking statements in this press release are discussed in Five Prime’s filings with the U.S. Securities and Exchange Commission, including the “Risk Factors” contained therein. Except as required by law, Five Prime assumes no obligation to update any forward-looking statements contained herein to reflect any change in expectations, even as new information becomes available.