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HilleVax initiates major workforce reduction, executives depart

EditorLina Guerrero
Published 05/12/2024, 22:22
HLVX
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In a significant restructuring move, HilleVax, Inc. (HLVX), which has seen its stock price decline by over 86% in the past year and currently maintains a market capitalization of approximately $93 million, has announced a substantial workforce reduction, alongside the departure of several top executives.

According to InvestingPro data, the company's shares are currently trading below their Fair Value, though investors should note the company's rapid cash burn rate. On December 4, 2024, the biotechnology company, which specializes in the development of norovirus vaccine candidates, reported that it would reduce its employee count by approximately 70%, affecting 28 staff members. This decision is part of an effort to decrease operating expenses and is anticipated to be mostly completed by the end of January 2025.

HilleVax anticipates incurring costs of around $6.1 million due to this downsizing, mainly from severance and related termination expenses. The majority of these charges are expected to be accounted for in the fourth quarter of 2024. While the company maintains a strong liquidity position with a current ratio of 14.25 and more cash than debt on its balance sheet, InvestingPro analysis reveals concerning trends in cash burn and profitability, with an EBITDA of -$134 million in the last twelve months. The company cautioned that the actual costs could materially differ from these preliminary estimates due to unforeseen events related to the workforce reduction.

Concurrently, the company announced the departure of three key officers. Sean McLoughlin, Chief Operating Officer; Astrid Borkowski, Chief Medical (TASE:PMCN) Officer; and Aditya Kohli, Chief Business Officer, will cease their current roles effective December 19, 2024. McLoughlin and Kohli will continue as consultants, while Kohli will also maintain his position on the Board of Directors. Borkowski will stay on as a non-executive employee through September 30, 2025. The exiting officers will receive severance benefits in line with their employment agreements.

In other recent news, HilleVax, Inc. has announced significant changes in its operations and financial structure. The biotechnology company has disclosed a major workforce reduction as part of its cost-cutting measures, which involved approximately 15 employees, constituting roughly 25% of its workforce.

This reduction is part of HilleVax's strategic efforts to lower operating expenses as it continues to assess the future of its norovirus vaccine candidates. The company anticipates incurring charges of about $1.3 million associated with this workforce reduction, primarily related to severance payments, benefits, and related termination costs.

In another development, HilleVax cleared its $26.2 million debt, ending its loan agreement with Hercules Capital (NYSE:HTGC), Inc. This move resulted in the termination of the agreement and the release of the lender's security interest in the company's assets.

On the product development front, HilleVax discontinued its HIL-214 vaccine for infants after failing to meet its primary and secondary efficacy endpoints in the NEST-IN1 clinical trial. This led to financial services firms H.C. Wainwright and Stifel downgrading HilleVax's stock from Buy to Neutral and reducing its share target respectively.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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