Thursday, February 12, 2009

Oscient Pharmaceuticals slashes staff levels, ponders a sale

By Mass High Tech Staff

Following a difficult second half of 2008, Oscient Pharmaceuticals Corp. reports that it is cutting staff levels by 32 percent and is considering a potential sale of the company.

Waltham-based Oscient (Nasdaq: OSCI) will reduce its current level of 305 employees at locations around the U.S. to approximately 215 between job cuts, and it will not be filling about 25 currently vacant positions. After the cuts have been completed, Oscient officials say the company will have 35 employees in Waltham and Skillman, N.J., and about 170 in other locations around the country.

Ranked as the sixth-fastest growing company in Massachusetts for 2008 by the Boston Business Journal, Oscient saw its stock value plummet from a 52-week high of $2.84 to about 19 cents as of yesterday’s close. The company has engaged Broadpoint Capital Inc. (Nasdaq: BPSG) of New York to help it consider strategic options, including a potential sale, officials said.

Oscient says the cuts should reduce payroll expenses by approximately $8 million. The company expects to take a hit from a restructuring charge of approximately $2 million in the first quarter of 2009, mostly from cash payments for severance expenses, the majority of which will be paid in the first and second quarters.

Last month Oscient subsidiary Guardian II Acquisition Corp. and its licensor, French firm Ethypharm SA, filed a lawsuit in the U.S. District Court for the District of Maryland against Maryland firm Lupin Pharmaceuticals Inc. and its Mumbai-based parent Lupin Limited over the cardiovascular drug Antara. According to Oscient officials, Lupin plans to market a generic version of Antara before the patent in question expires in August 2020.

Oscient develops pharmaceutical drugs for the treatment of high blood cholesterol and high triglycerides, as well as treatment for chronic bronchitis and pneumonia. For 2007, the company reported a net loss of $29.8 million on total revenue of $80 million.