In a strategic move to extend its financial resources, CytomX Therapeutics (NASDAQ:CTMX), Inc. (market cap: $88.43 million) has revealed a major restructuring plan that includes a significant reduction of its workforce. The South San Francisco-based pharmaceutical company, known for its focus on antibody therapeutics and its strong balance sheet with more cash than debt, announced today that it will decrease its staff by approximately 40%. According to InvestingPro analysis, the company has maintained profitability over the last twelve months despite challenges, with revenue growing by nearly 34%.
This decision is part of CytomX's efforts to prioritize its leading drug candidate, CX-2051 (EpCAM PROBODY® ADC), and to support its ongoing research collaborations. The reduction will mainly affect general and administrative personnel, as well as employees involved in non-partnered internal research programs. InvestingPro data shows the company is actively managing its resources, with three analysts recently revising their earnings expectations upward for the upcoming period.
The company anticipates that the workforce reduction will be largely completed within the first quarter of 2025. These measures are expected to extend CytomX's cash runway into the second quarter of 2026, providing a longer horizon for the development and potential commercialization of its key projects.
CytomX estimates that it will incur restructuring costs of about $5 million to $6 million, mostly related to severance payments and other employee-related expenses. These charges are expected to be recorded predominantly in the first quarter of 2025, with cash payments commencing in the same period.
In other recent news, CytomX Therapeutics has been making significant strides in its clinical pipeline. The company's lead program, CX-2051, targets advanced metastatic colorectal cancer and is expected to report initial Phase 1a clinical data in the first half of this year.
Additionally, other clinical stage programs such as CX-904 and CX-801 are advancing, with initial data anticipated in 2025. Analysts from BMO Capital Markets and Piper Sandler have adjusted their price targets on CytomX to $3.68 and $3.25 respectively, reflecting recent developments and the company's robust pipeline.
Moreover, CytomX has reported a strong revenue growth of 33.7% over the past year and ended the third quarter of 2024 with $117.6 million in cash, cash equivalents, and investments. The company has also initiated a restructuring plan to concentrate resources on its clinical programs, aiming to extend its cash runway into the second quarter of 2026.
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