Nektar Therapeutics NKTR, +6.26% shares rallied late Monday after the biotech drug maker said it was cutting staff by 60% in San Francisco, where the company is based, and shifting its focus to immunology drugs in a partnership with Eli Lilly & Co. LLY, -0.64%. Nektar shares popped as much as 7% in the extended session, after they closed the regular session up 6.3% at 98 cents a share. The 60%-cut figures a reduction of about 88 employees in San Francisco, resulting, as the company stated, in a staff of about 55 employees. At the end of 2022, Nektar reported a staff of 216, of which 140 were involved with research and development. Nektar also said its Chief Financial Officer Jillian Thomsen was “stepping down,” and Sandra Gardiner would serve as acting CFO. Also, Brian Kotzin, Nektar’s chief medical officer, will step down from that position to that of an adviser, while Mary Tagliaferri will become the new CMO. The company said that it plans to keep current staff at its Huntsville, Ala., manufacturing plant, and said it expects the restructuring to be “substantially” complete by June. Meanwhile, the company said it will continue with two early stage immunology drug candidates, one of which it hopes to file with the Food and Drug Administration in 2024, continue its work with Eli Lilly on its Rezpeg atopic dermatitis drug candidate, and look for a “strategic development partner” for its NKTR-255 cancer drug candidate. “The strategic initiative we announced today is intended to further streamline our operations and to extend considerably our cash runway into the middle of 2026,” said Howard Robin, Nektar chief executive, in a statement. “Although the actions we are taking today are difficult, we are incredibly grateful for the contributions of the employees departing Nektar.” The company reported it had about $456 million in cash at the end of March, and expects the workforce reduction and its $8 million severance charge to save about $30 million a year.
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