SurModics to Cut Work Force by 9%; CFO to Go
Eden Prairie-based biopharmaceutical company SurModics, Inc., on Tuesday announced plans to reduce its work force by 9 percent-and Chief Financial Officer Philip D. Ankeny is among those who will be leaving.
According to regulatory filings, SurModics had 215 employees as of December 1-the majority, 166, in research, product development, quality, and manufacturing positions.
In addition to Ankeny, one other top executive is included in the reduction: Vice President of Human Resources Jan M. Webster.
“This is a critical transition for SurModics to implement the components of our strategic plan that focus and position our business for maximum long-term success,” President and CEO Gary Maharaj said in a statement. “Importantly, we expect to maintain our commitment to R&D investment to drive growth opportunities in our core medical device and [in vitro diagnostics] businesses.”
SurModics said that in addition to trimming its work force, it also will consolidate its product manufacturing operations in Owings Mills, Maryland to its corporate headquarters.
The company said that it expects to take one-time charges of $1.1 million to $1.4 million in the fourth quarter of fiscal 2011, which ends in September-but the just-announced transitions are expected to save it between $1.7 million and $2 million annually after that.
SurModics named Timothy J. Arens vice president of finance and interim CFO. Bryan K. Phillips, meanwhile, will serve as senior vice president of legal and human resources as well as general counsel and secretary.
SurModics has experienced a rocky road within the past year or so. In October 2010, the company announced plans to reduce its work force by 13 percent, or slightly more than 30 employees, in order to more closely align operating expenses and revenue.
Then in December, New York-based Ramius-the company's largest shareholder-nominated three candidates for board positions due to the company's “long-term underperformance.” Ramius said that shareholders were “not satisfied with the company's poor operational and stock performance” and that “operational and strategic changes are required now.”
SurModics in January agreed to appoint two of the board members nominated by Ramius, which put an end to the dispute. But shortly after that, Ramius issued a statement saying that it supports efforts to explore strategic alternatives, “including a potential sale,” for the company's pharmaceutical business.
In June, after Johnson & Johnson announced plans to exit the drug-coated stent market by the end of this year, Maharaj said he was “disappointed” by the decision, as the company is an “important customer.” Regulatory filings indicate that Johnson & Johnson accounted for roughly 17 percent of SurModics' overall sales in fiscal 2010.
SurModics, founded in 1979, provides drug-delivery and surface-modification technologies and in vitro diagnostic test kits to the health care industry.