Geron Corp said it will stop development of its stem cell programs to focus more on its cancer drugs, sending its shares down as much as 20 percent in after-market trading.
The move will see Geron cut 66 full-time positions, or about 38 percent of its workforce and stop the development of the first U.S.-approved human embryonic stem cell trial.
The company expects to take a one-time charge of about $5 million in the fourth quarter and about $3 million in the first half of next year.
"In the current environment of capital scarcity and uncertain economic conditions, we intend to focus our resources on advancing our Phase 2 clinical trials of imetelstat and GRN1005," Chief Executive John Scarlett said.
"This would not be possible if we continue to fund the stem cell programs at the current levels."
Geron expects to end the year with cash and investments in excess of $150 million.
Shares of Menlo Park, California-based company were down 20 percent at $1.75 in extended trading. They had closed at $2.20 on Monday on Nasdaq.
(Reporting by Kavyanjali Kaushik in Bangalore; Editing by Viraj Nair)