In a move to reduce operational costs and preserve capital, Mustang Bio (NASDAQ:MBIO) has decided to cut its workforce by about 81%. This decision was approved by the company's board of directors on April 10, 2024, amid challenges in fundraising and ongoing uncertainty surrounding the U.S. Committee on Foreign Investment's review of a significant transaction.
The workforce reduction is primarily scheduled for April 2024 and is expected to be largely completed within the second quarter of the year. Mustang Bio anticipates incurring restructuring charges of approximately $200,000 related to employee termination costs, which will likely be reflected in the company's financials for the second quarter of 2024.
The transaction under review involves the sale of Mustang Bio's leasehold interest in its cell processing facility in Worcester, Massachusetts, along with assets related to cell and gene therapy manufacturing and production, to uBriGene (Boston) Biosciences, Inc. uBriGene is an indirect, wholly-owned subsidiary of UBriGene (Jiangsu) Biosciences Co., Ltd., a Chinese contract development and manufacturing organization.
While the company expects to face one-time employee termination expenditures, there may also be additional charges or cash expenditures that are not currently anticipated. These could arise due to events related to the workforce reduction or efforts to retain certain employees. Mustang Bio and its board of directors are actively considering all strategic options for the business going forward.
This announcement is based on a press release statement and reflects the company's current expectations and assumptions regarding its financial performance. Actual costs and the impact of these changes may vary as the situation develops. Investors are advised to follow the company's official communications for further updates on this matter.
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