Forbes Medi-Tech has said it will focus exclusively on its nutraceutical business, ceasing all its in-house drug activities.
The restructuring plan announced today means that the Canadian company will put all its weight behind its functional foods and dietary supplements businesses, which the firm said are its "revenue-generating" operations.
"We realize the need to realign our business to focus on areas that are generating immediate revenue. The head count and expense reductions that we're announcing today, while difficult, allow us to focus on further developing our nutraceutical business," said Charles Butt, the firm's president and CEO.
Forbes said the move will involve slashing personnel, as well as reducing research and development expenses by around $2.7m. Last year, the company spent some CA$3.5m (US$3.49m) on R&D.
In its latest annual report, Forbes reported net loss for the year ended December 31 2007 of $11.7m, more than last year's loss of $10.8m.
At the time, the firm's chief financial officer David Goold said the loss did not reflect on Forbes' nutraceutical sales, which continued to show good growth.
The company today said that its strategic focus on the nutraceutical sector "represents a truly pivotal point in Forbes' development".
"The estimated global market for functional foods has reached more than US$30 billion, and consumer trends point to an increasingly active population that values the pursuit of healthier lifestyles. Building on these positive dynamics, Forbes will continue to target exciting commercial opportunities in the functional foods and dietary supplement markets in the US, Europe, and the rest of the world," said Butt.
The company said it will now focus more on growing its sales of Reducol, its flagship cholesterol-lowering ingredient, as well as its phytosterol product portfolio. Adjacently, it plans to improve profitability and further reduce costs.
Forbes will also aim to target key mergers and acquisitions in order to further build its nutraceutical business base.
It will cease all pharmaceutical development activities, and will close its drug development facility in San Diego, California. However, it said it will continue to look for "favourable business development opportunities" for its pharmaceutical business unit, including out-sourcing and licensing agreements.