Biting the bullet

The painful cutbacks being undertaken by Sphinx Pharmaceuticals Inc. are a pointed reminder that penny pinching needs to begin when times are good.

The company's experience provides a cautionary tale for others in the industry. It was a darling of the 1991-92 financing window, raising $75 million in a January 1992 IPO of 5 million shares at $15. With its announced cutbacks last week, including nearly 30 percent of its employees, the cash hoard is down to some $40 million and the stock has been depressed to $3.75...