Argos Therapeutics Inc. (NASDAQ: ARGS) recently announced a cost-cutting plan that would see the company eliminate $2.3 million from its annual operating costs. At the same time, the company is expecting up to $60 million in new capital through the sale of common shares and warrants to purchase common shares.
Where is the $2.3 million cost-saving coming from?
As part of its efficiency drive, Argos Therapeutics Inc. (NASDAQ: ARGS) announced that it was letting go some of its employees. At least 18 workers were earmarked for removal from the payroll. To make those changes, the company is expected to incur at least $0.4 million in layoff expenses in 2Q2016 and 3Q2016. Thereafter management anticipates annual operating costs to decline by $2.3 million.
Although management said that retrenching staff was a tough decision to make, it was necessary for the company to do it so that it can stretch out its thin resources and keep its various research and clinical projects moving. Argos Therapeutics Inc .(NASDAQ: ARGS) is engaged in the business of developing therapies for kidney cancer. It is currently in the late-stage development of a cancer drug candidate known as AGS-003.
R&D accounts for the bulk of Argos’ costs. The company has funneled more than $250 million to R&D since its inception nearly two decades ago.
$60 million in new funding
Cost-curtailment is only one of the measures Argos Therapeutics Inc. (NASDAQ: ARGS) is taking to strengthen its balance. The management is also engaging investors to put more money into the company. For example, the company recently announced a private securities offering arrangement that would enable it to raise $60 million. The securities offerings involved issuance of new common stock shares and warrants to purchase common shares.
The company said that initial proceeds from the securities offering would enable it to meet its expensive through 3Q2016. Subsequent proceeds would enable it to meet ongoing expenses through at least 2Q2017.
Argos Therapeutics Inc. (NASDAQ: ARGS) plans to report 1Q2016 earnings after the close of market on May 12. In the previous quarter’s report, the company posted EPS loss of $0.84; better than EPS loss of $0.88 that analysts estimated on the average.