Lexicon Pharmaceuticals (NASDAQ:LXRX) is narrowing its business focus in an effort that will lead to a substantial reduction in head count, and its CEO will also be departing.

The company announced that it will concentrate its resources on late-stage drug development programs. For the most part, this consists of two treatments it's currently developing -- one for diabetes, and the other for carcinoid syndrome. As a result of this new concentration, around 115 employees will no longer work at the firm. That's roughly 45% of the present workforce.

With these measures, Lexicon says it will reduce its expenses by a net amount of approximately $14 million for the balance of its fiscal 2014 and around $22 million annually going forward.

In the press release announcing the news, the firm quoted CEO Arthur Sands as saying that the new focus "increases Lexicon's financial strength and will enable the company to more effectively advance our key late-stage programs and to prepare for commercialization."

Sands will not stay in his current position. In the press release, the company revealed that he has "indicated his intention to develop a succession plan with the board of directors to identify a new chief executive officer for the next phase of Lexicon's growth." Sands will stay in his position until the board finds his replacement. 

Last month, Lexicon's share price swooned after the company reported disappointing results from its phase 2 study of LX1033, a treatment for irritable bowel syndrome. 

Fool contributor Eric Volkman has no position in Lexicon Pharmaceuticals. Nor does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.