FibroGen (FGEN) to cut 32% of U.S workforce
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FibroGen (NASDAQ: FGEN) disclosed that on July 14, 2023, the Company approved a restructuring plan to lower the Company’s operating expenses. The Plan includes an expected reduction to the Company’s U.S. workforce of approximately 32% (or 104 employees).
The Company would like to extend its tremendous gratitude to these employees, not only for their contributions to the strong workforce and culture at FibroGen, but to their large part in the progress we have made, and continue to make, in science and the biotechnology industry.
The Company estimates that it will incur non-recurring charges in the range of $13-15 million in connection with the Plan, primarily consisting of severance payments, notice pay, accrued vacation, and employee benefits contributions. The Company expects that the majority of the restructuring charges will be incurred in the third quarter of fiscal year 2023 and that the implementation of the headcount reductions, including cash payments, will be substantially complete by the end of the first quarter of 2024. The Company estimates that it will save approximately $30-35 million in annual expenses on a go-forward basis as a direct result of the Plan.
The Company expects that its existing cash, cash equivalents, investments, and accounts receivable will enable it to fund its operating expenses and capital expenditure requirements into 2026.
Potential position eliminations are subject to legal requirements that vary by jurisdiction, which may extend this process beyond the first quarter of 2024 in certain cases. The charges that the Company expects to incur, and the savings obtained, are subject to a number of assumptions, including legal requirements in various jurisdictions, and actual expenses and savings may differ materially from the estimates disclosed above. The Company may incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the reduction.
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