(Reuters) - Array Biopharma said partner Amgen Inc plans to end an agreement to develop and market Array’s drug to treat Type 2 diabetes.
Array also said that it would cut 20 percent of its workforce as it focuses more on proprietary research.
Array shares fell as much as 7 percent to $6.12 in trading after the bell on Wednesday.
The company said it would record a one-time restructuring charge of $2.7 million in the first quarter of fiscal 2014.
The company said it would have 200 employees after cutting 50 jobs. Most of the job cuts will be in the company’s drug discovery business.
Array and Amgen entered into the agreement in December 2009, under which Array received an upfront payment of $60 million and milestone payments of $8.5 million.
Amgen was funding a number of full-time employees as part of the agreement to identify more such drugs.
The drug, AMG 151, is being tested by Amgen in a mid-stage trial in patients with Type 2 diabetes.
The agreement will end on October 5, Array said in a regulatory filing. (link.reuters.com/nug32v)
Shares of the company closed at $6.55 on Wednesday on the Nasdaq.
(This story was fixed to correct headline and paragraph 1 to clarify that the termination of Amgen agreement and job cuts were unrelated)
Reporting By Vrinda Manocha in Bangalore; Editing by Saumyadeb Chakrabarty