NewLink Genetics (NLNK) Misses Q2 EPS by 35c; Announces Restructuring Plans

NewLink Genetics (NASDAQ: NLNK) reported Q2 EPS of ($1.12), $0.35 worse than the analyst estimate of ($0.77).

Restructuring

The company also announced that it has implemented a significant restructuring program following the May results of the IMPRESS Phase 3 study of algenpantucel-L. The objective of the restructuring is to focus the company’s financial resources on the following priorities:

• Progress and accelerate the development of indoximod;
• Continue the alliances with Genentech (GDC-0919) and Merck (Ebola vaccine candidate);
• Advancing other drug discovery programs, including both PTEN and Zika virus; and
• Evaluate external opportunities to expand our pipeline.

The restructuring includes the following initiatives:

• Winding down HyperAcute Cellular Immunotherapy clinical trials that do not include a checkpoint inhibitor combination;
• Winding down commercial manufacturing capacity for algenpantucel-L;
• Consolidating the Company’s facilities footprint from 133,000 square feet to approximately 66,000 square feet;
• Reducing headcount from approximately 230 to approximately 130; and
• Focusing capital spending to primarily support drug discovery and development.

We recorded $12.3 million in restructuring expenses in Q2, including severance expense, the impairment of fixed assets, and the costs of terminating certain contracts. In Q3, the Company expects to record small additional charges relating to the closing or reduction of leased facilities.

For earnings history and earnings-related data on NewLink Genetics (NLNK) click here.

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