ZIOPHARM ONCOLOGY 8-K 2013
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 2, 2013
ZIOPHARM Oncology, Inc.
(Exact Name of Registrant as Specified in Charter)
(Registrants telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
As of the close of business on March 31, 2013, ZIOPHARM Oncology, Inc., or the Company, had approximately $55.7 million of cash and cash equivalents on an unaudited basis. The Company anticipates that following the implementation of the workforce reduction plan described in Item 2.05 below and other operating cost reductions, its cash resources will be sufficient to fund the Companys operations into the first quarter of 2014.
On April 3, 2013, the Company completed a workforce reduction plan pursuant to which it eliminated a total of 65 positions, comprised of 40 filled positions and 25 unfilled positions across various functions and locations. Employees whose positions were eliminated as part of the plan were notified beginning on April 2, 2013. Affected employees are being offered separation benefits, including severance payments, and temporary healthcare coverage assistance.
As previously announced, the Companys Phase 3 trial of palifosfamide (ZIO-201), entitled PICASSO 3, failed to meet its primary endpoint. The workforce reduction plan is being implemented to reduce costs as part of the Companys decision to terminate development of palifosfamide in first-line metastatic soft tissue sarcoma and place exclusive strategic focus on its synthetic biology programs, which are being developed in partnership with Intrexon Corporation.
In connection with the elimination of filled positions as part of the workforce reduction plan, the Company estimates incurring total charges of $1.6 million to $1.8 million, primarily for one-time contractual severance benefits. These charges will occur in the second quarter of 2013. Additionally, the Company is evaluating its facilities and the associated contractual obligations to determine the appropriate course of action and any associated charges for exit and disposal activities. The Company currently cannot estimate these amounts, but expects to file an amendment to this Current Report on Form 8-K within four business days of making such determination.
The disclosure contained in Item 2.02 above and in this Item 2.05 contains certain forward-looking information about ZIOPHARM Oncology, Inc. that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. Words such as expect(s), feel(s), believe(s), will, may, anticipate(s) and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements regarding the expected charges and costs associated with the workforce reduction plan; the Companys expectations regarding the sufficiency of its cash resources to fund its operations into the first quarter of 2014; the Companys expected plans with respect to the development of its therapeutic products; the Companys ability to expand its long-term business opportunities; financial projections and estimates and their underlying assumptions; and future performance. All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to: whether the costs incurred in connection with the workforce reduction plan will exceed the Companys estimates; whether the Companys current cash and cash equivalents will be sufficient to fund the Companys operations for as long as anticipated; whether any of the Companys therapeutic discovery and development programs will advance further in the clinical trials process and whether and when, if at all, they will receive final approval from the U.S. Food and Drug Administration or equivalent foreign regulatory agencies and for which indications; whether any of the Companys therapeutic products will be successfully marketed if approved; whether any of the Companys therapeutic product discovery and development efforts will be successful; the Companys ability to achieve the results contemplated by its collaboration agreements; the strength and enforceability of the Companys intellectual property rights; competition from pharmaceutical and biotechnology companies; the development of and the Companys
ability to take advantage of the market for its therapeutic products; the Companys ability to raise additional capital to fund its operations on terms acceptable to it; general economic conditions; and the other risk factors contained in the Companys periodic and interim reports filed from time to time with the Securities and Exchange Commission, including but not limited to the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and we do not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of or non-occurrence of any events.
As part of the Companys workforce reduction plan described above, Hagop Youssoufian, M.D., M.Sc., the Companys President of Research and Development and Chief Medical Officer, was informed on April 2, 2013 of his termination without cause. In connection with his termination, Dr. Youssoufian has agreed to receive a severance payment equal to 100% of his current annual base salary in lieu of the total severance benefits to which he was entitled pursuant to the employment agreement that he entered into with the Company on July 8, 2011, and as amended on March 30, 2012. In addition, Dr. Youssoufian has agreed to provide consulting services to the Company as may be requested from time to time by the Companys Chief Executive Officer. Dr. Youssoufians employment agreement is filed as Exhibit 10.1 to the Companys Current Report on 8-K filed July 15, 2011 and the amendment to Dr. Youssoufians employment agreement is filed as Exhibit 10.1 to the Companys Current Report on Form 8-K filed April 3, 2012.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.