Histogenics Corp., fresh from a merger with fellow Bay State firm Prochon Biotech, has no plans for layoffs, contrary to a report in an Israeli journal.
The Globes new outlet, a business daily based in Rishon Le-Zion, Israel, reported yesterday that Histogenics "will make substantial cuts" to its R&D unit in Ness Ziona.
"There are several inaccuracies in this article. For example, while there are 15 employees in Israel, only four are in R&D. We have not made any cuts in Israel to date as we are still sorting through our combined strategy and resource allocation," Histogenics CEO Patrick O’Donnell told MassDevice, adding that the company plans to add between 17 and 21 jobs in the U.S. by the end of the year.
The two companies announced their all-stock merger last month, quickly following up with a $34 million debt-and-equity round. At the time O’Donnell, who moved from Prochon’s corner office to head up the new entity, said no layoffs were in the works.
The Globes article, written by Gali Weinreb, also claims that Histogenics and Prochon "have spent a long time in the product development stage and were in financial difficulties, which led to the scaling back of R&D activities and the ultimate merger."
O’Donnell said that characterization is not accurate.
"We were in the same boat as a lot of companies that have products in Phase II and Pahe III studies. We were seeking ways to bring capital into the companies," he said. "We just found that the synergies of these two companies would make for better opportunities to go seek new capital."
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