As it faces possible further Horizant studies, XenoPort cuts half its staff & trims R&D work

XenoPort slashes half its work force

SANTA CLARA, Calif. — Drug developer XenoPort Inc. is cutting half of its staff and eliminating drug discovery work in order to save money as it prepares to focus solely on drugs already in clinical testing.

The company will be eliminating about 110 jobs. It expects the cutbacks to save about $15.6 million per year, although it will book $4.2 million in restructuring charges in the first half of 2010, and expects other costs.

In February, the Food and Drug Administration delayed approval of the company’s drug candidate Horizant, which is intended to treat restless leg syndrome. The agency cited animal study results that showed pancreatic cell tumors in rats. Xenoport and its partner GlaxoSmithKline PLC said they would assess what steps to take next with Horizant and get back to the FDA.

XenoPort announced its plans Friday afternoon, and its shares fell 5.7 percent on the day. They rose 52 cents, or 7 percent, to close Monday at $7.94.

The company employed 219 workers at the end of 2009. Through its partnership with GlaxoSmithKline, it is developing Horizant as a treatment for moderate to severe restless legs syndrome and for nerve pain. The company said it also plans to complete a mid-stage study of a drug intended to treat heartburn, and start a mid-stage trial of a drug designed to treat Parkinson’s disease.

(This version CORRECTS that FDA did not call for further tests or warnings)