World Heart Corp. (NSDQ:WHRT) said it laid off 77% of its workforce in an effort to hoard cash while it explores "various corporate strategic options."
The Salt Lake City-based heart pump maker said the layoffs of 19 full-time workers and 1 part-time employee include its chief technology officer, John Woodard, effective today, according to a regulatory filing. Employees were notified yesterday, according to the filing.
"Personnel reductions will be made across the Company’s entire organization, including the following departments: research and development, manufacturing, quality, facilities, human resources and accounting," the company said, noting that it expects to pay out $725,000 in severance and benefits payments.
Add to that an additional $240,000 to $340,000 in charges for canceled contracts and orders and for lease obligations. All told, the move is expected to cost between $965,000 and $1.1 million, with about $860,000 coming due during the 1st and 2nd quarters and the remainder over the rest of the year.
Last summer World Heart cut 21 employees, nearly half of its workforce, and halted clinical trials of its Levacor ventricular assist device. That prompted its shares to slip below the $1 apiece mark, triggering a warning from the NASDAQ stock exchange of a potential de-listing as of Feb. 13, 2012.
But earlier this month, NASDAQ gave World Heart a 6-month de-listing reprieve, giving the company another 6 months to boost its share price above the $1 requirement. The new deadline is August 13.
When the original layoffs were announced, CFO Morgan Brown told MassDevice.com that World Heart planned to focus on developing its MiFlow, an adult-sized version of its PediaFlow pediatric VAD. The decision to leave the Levacor device on the table came after conversations with the FDA made it apparent that the timeline to approval was longer than expected.
“It became increasingly clear that as we went down process timelines we were hoping for were not going to be achieved and we were going to be delayed significantly,” Brown told us at the time.
WHRT shares were trading at 24 cents as of about 10:45 this morning.