Restructuring Costs

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring Costs

Restructuring Costs

In June 2016, the Company determined to wind-down its azficel-T operations at the Company’s Exton, PA facility and to reduce the workforce that supports such operations. This decision enables the Company to focus its resources towards pre-clinical and clinical research and development of its gene-therapy product candidates.

Restructuring-related charges for both the three and six months ended June 30, 2016 totaled approximately $0.3 million and were comprised of approximately $0.3 million of employee severance and benefit related charges and less than $0.1 million of asset impairments.

The restructuring and asset impairment activity for the six months ended June 30, 2016 was as follows:

($ in thousands)	Employee Severance and Benefits		Asset Impairments			Total
Accrued restructuring balance as of December 31, 2015	$	—	$	—		$	—
Additional accruals	258		34			292
Cash payments	—		—			—
Non-cash settlements	—		(34		)	(34		)
Accrued restructuring balance as of June 30, 2016	$	258	$	—		$	258

The restructuring-related charges incurred during the three and six months ended June 30, 2016 related to employee severance and benefits resulting from the reduction-in-workforce and the impairment of property and equipment. In connection with the reduction-in-workforce, 25 positions were eliminated, primarily in the areas of manufacturing and quality operations, representing approximately 50% of the Company's employees. The accrued restructuring balance as of June 30, 2016 relates to employee severance and benefits which are expected to be paid in the third quarter of 2016 and is recorded as a current liability within accrued expenses in the Condensed Consolidated Balance Sheet. Additionally, the Company recognized inventory write-downs in cost of goods sold related to the wind-down of its azficel-T operations as described in Note 4.

The Company expects to incur additional charges in the future for employee severance and benefits, contract termination and wind-down costs, assets impairments and costs to decommission the Company’s azficel-T manufacturing facility, but cannot estimate them at this time.