CuraGen Corp. will close its pilot manufacturing plant, effective July 27, 2007. As a result, the company will reduce its workforce by approximately 40 employees, primarily composed of preclinical and manufacturing researchers, and additional support staff from within the organization. CuraGen previously announced that it would make reductions in early-stage and preclinical drug discovery and decreased emphasis on internal manufacturing capabilities.

The pilot facility, also known as the Biopharmaceutical Sciences Process (BPS) facility, is a 29,000-sq.-ft. leased facility that was used by CuraGen for pilot scale production of proteins and antibodies. The BPS facility primarily supported early-stage pipeline development and non-GMP manufacturing.

Affected employees will be eligible for a severance package that includes severance pay, continuation of benefits and outplacement services. Charges relating to this move, the majority of which will be accrued during the second quarter of 2007, are estimated to be approximately $8 million, including non-cash charges of approximately $6 million in writeoffs.

“The contribution made by all members of the CuraGen team is sincerely and deeply appreciated. This strategic decision was difficult but necessary to ensure that CuraGen focuses its resources and invests appropriately into velafermin, belinostat and CR011-vcMMAE which represent the most significant value to CuraGen, its employees and its shareholders,” stated Frank Armstrong, M.D., president and chief executive officer of CuraGen.