Gediminas Jasionis

Downsizings At MiddleBrook Pharmaceuticals, Inc. (Nasdaq: MBRK)

by Gediminas Jasionis December 4, 2009
middlebrook.jpgSome selloff followed the latest news from MiddleBrook Pharmaceuticals, Inc. (Nasdaq: MBRK), as the company took a rather drastic staff reduction course. One third of existing sales managers and field sales representatives and 20% of corporate staff will have to look for new jobs, as the company seeks to reduce expenses and concentrate on sales in its best performing territories.

$1.9 million in restructuring charges will follow this action. Middlebrook should eventually be saving $19 million per annum from this staff reduction. Considering that the company has been constantly incurring a net loss of around $42 million per annum, this expense reduction would cut it in half.

Anyhow, partial loss reduction isn't likely to boost the stock price and the company has already been threatened with delisting by the Nasdaq, if their shares continue trading below the $1 limit. Technically we might see a slight retracement going up to $0.7-$0.72, but the price is likely to reverse at these points if ever reaching them.

The job reduction report at MiddleBrook coincided with the governments issuance of unemployment data, which showed only 11k jobs were lost in November. It seems while most other companies have already restructured, Middlebrook has placed itself in a laggard position.

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