Presented by BioPharm Process Associates…

What was once a speculation is now a reality. Arca Biopharma (ABIO) confirmed today that it was in fact restructuring and in the process, laid off 40 employees on Wednesday. The official announcement comes one day after the news first broke right here on our site.

ABIO said it would take a $1M charge for the restructuring and that approximately $600,000 would go towards severance. That means it’s math time…

A. Number of employees let go = 40

B. Total severance charge to ABIO = $600,000

C. Severance/employee = B/A = $15,000

Not much of a severance, but it’s something, right? Of course, the IRS always gets its cut, so the take-home amount is lower.

The entire restructuring comes in connection with ABIO’s previously announced strategy to seek “strategic alternatives” for selling Gencaro instead of building up its own sales force and marketing/distribution resources. The plan also comes as part of a decision to lower the company’s operating expenses as it tries to save cash.

ABIO had about $35M in cash for the quarter ending March 31, 2009.

An email to Derek Cole, VP of Investor Relations, yesterday was returned this morning confirming the layoffs. Cole also mentioned that ABIO has not received the FDA’s response to the Gencaro NDA ahead of their PDUFA date of May 31, 2009.

Check out our posts from yesterday (here, here and here) to see what we found out before the official press release.

ABIO shares are down again today, $0.68 (7%) to $8.32 at the time of this post.

Anonymous Tip? Comments? Contact us at: hr@iguanabio.com

No disclosures or positions

Image from wikimedia

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