Chiasma, Inc., a biopharmaceutical company focused on improving the lives of patients with rare and serious chronic diseases, today announced that it is implementing a corporate restructuring plan intended to focus the company’s resources on the continued development of Mycapssa (octreotide) capsules for the maintenance treatment of adult acromegaly patients.
This plan includes an immediate reduction of approximately 33% of the company’s workforce, including substantially all of its commercial personnel.
As a result of the reduction in force, the company estimates that it will incur aggregate charges of approximately $1.4 million to $1.6 million for one-time severance and related costs in the second quarter of 2016, which charges are expected to result in cash expenditures that will be substantially complete by the end of the second quarter of 2017. An estimated additional $0.3 million to $0.4 million of one-time non-cash restructuring charges related to previously capitalized commercial software are also expected this quarter. As of March 31, 2016, Chiasma had $134.3 million of cash, cash equivalents and marketable securities.
This action follows the company’s recent participation in an End of Review Meeting with the United States Food and Drug Administration (FDA) regarding the company’s New Drug Application (NDA) for Mycapssa™ (octreotide) capsules for the maintenance treatment of adult patients with acromegaly. As previously announced, the company received a Complete Response Letter (CRL) for its NDA on April 15, 2016. At the meeting, the FDA reiterated the concerns it expressed in the CRL regarding certain aspects of the single-arm, open-label Phase 3 clinical trial upon which the NDA was based and the FDA’s belief that the company’s application had failed to provide substantial evidence of efficacy to warrant approval.
“We believe this reduction in staffing and spending is the appropriate action to preserve shareholder value at this time since it is unlikely we will be able to commercially launch Mycapssa in the near term,” commented Mark Leuchtenberger, president and chief executive officer of Chiasma. “I would like to thank the high-caliber individuals affected by this plan for their tireless efforts and contributions to the organization. We continue to believe in the potential for Mycapssa to help many patients with acromegaly and intend to continue working diligently on their behalf.”
After completing its review of FDA feedback from the End of Review Meeting, the company expects to explore all potential paths forward, including whether it can address the FDA’s concerns through the submission of additional clinical analyses or data, or other means. Chiasma also plans to continue its evaluation of business priorities and additional opportunities for cost savings.
Chiasma is proceeding as planned with its recently initiated MPOWERED™ Phase 3 trial comparing the safety and efficacy of Mycapssa to monthly somatostatin analog injections to support a potential Marketing Authorization Application (MAA) with the European Medicines Agency (EMA).
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