Legg Mason downgraded ArQule (ARQL) to hold from buy.
Analyst Stefan Loren says the company's restructuring plans include the closure of its Redwood City, CA and Cambridge, England facilities, as well as 31% reduction in its workforce, or about 128 employees. He notes the majority of the restructuring is a result of less than favorable prospects for the company's ADMET technology.
He says the restructuring will result in a charge of about $12 million in the fourth quarter to account for severance and facility closing costs, but should result in annual savings of approximately $12 million. Loren narrowed his 98 cent 2002 loss estimate to a 79 cent loss, and cut the $1.25 2003 loss estimate to an 80 cent loss as the result of the restructuring benefit.