(Reuters) - Savient Pharmaceuticals Inc said it would cut about 35 percent of its workforce and named a new chief executive as it struggles to stay afloat amid weak sales of its chronic gout drug Krystexxa.
Shares of Savient rose as much as 8 percent to 66 cents after the announcement on Monday.
As of February 22, Savient had 173 employees, according to a regulatory filing.
Louis Ferrari, executive vice president, will take the helm of the company from David Norton, who had been serving as interim CEO since February.
Ferrari joined Savient in February 2011 from Johnson and Johnson, where he was vice president of sales and marketing for oncology and nephrology.
Krystexxa, once deemed to be a blockbuster drug, has largely disappointed with tepid sales since its launch in September 2010, causing the loss-making company’s stock price to fall more than 96 percent since then.
The drug treats chronic gout in adult patients who do not respond to conventional therapy.
The job cuts, which would include current vacancies, would be effective September 10. Savient said it does not expect service levels to patients, doctors or other customers to be affected by the cuts.
Savient said it expects to take charges of about $4.7 million for restructuring and employee severance, of which about $3.6 million would be this year. It expects to save about $56 million in annual operating expense by 2013.
Shares of the company were trading at 62 cents in early afternoon on the Nasdaq.
Reporting by Zeba Siddiqui in Bangalore; Editing by Supriya Kurane