Chiasma Announces Workforce Reduction
August 16 2016 - 9:00AM
Chiasma, Inc. (NASDAQ:CHMA), a biopharmaceutical company focused on
improving the lives of patients with rare and serious chronic
diseases, today announced that it is further reducing its workforce
by approximately 44%, primarily in the company’s research and
general and administrative functions, to lower its operating
expenses and extend its cash runway. This action follows
Chiasma’s announcement of a corporate restructuring plan in June
2016, which included an initial workforce reduction composed
primarily of the company’s commercial personnel. Chiasma
intends to focus its resources on the continued development of
Mycapssa® (octreotide) capsules for the maintenance treatment of
adult patients with acromegaly.
“We extend our sincere appreciation to those who
will be leaving Chiasma for their contributions toward bringing new
treatment options to patients,” said Mark Leuchtenberger, president
and chief executive officer of Chiasma. “While this decision
is extremely difficult, we believe it is the prudent course of
action as we seek to conserve our cash and continue our dialogue
with the U.S. Food and Drug Administration (FDA) regarding
development of Mycapssa.”
Chiasma estimates that it will incur aggregate
charges related to the headcount reduction of approximately $0.8
million to $1.0 million for one-time severance and related costs in
the third quarter of 2016. These charges are expected to
result in cash expenditures that will be substantially complete by
the end of the first quarter of 2017. As of June 30, 2016,
Chiasma had $115.6 million of cash, cash equivalents and marketable
securities.
This action is expected to be substantially
complete in the current quarter, and when combined with Chiasma’s
previous restructuring plan, will result in a reduction to the
company’s workforce of more than 60% since May 1, 2016. The
company expects to realize more than $7.0 million in annualized
payroll and related expense savings as a result of these combined
actions.
Chiasma is retaining a core team of fewer than 25
executive, clinical, regulatory and general and administrative
personnel. The company continues to enroll patients in its
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).
About Mycapssa
Mycapssa is the conditional trade name of
octreotide capsules, an investigational new oral drug in
development for the maintenance therapy of adult patients with
acromegaly. Mycapssa has been granted orphan designation in
the United States and the European Union for the potential
treatment of acromegaly. Mycapssa has not been approved for
use in any jurisdiction.
About Chiasma
Chiasma is dedicated to improving the lives of
patients who face challenges associated with their existing
treatments for rare and serious chronic diseases, using its
Transient Permeability Enhancer (TPE®) technology platform.
The company is conducting an international Phase 3 clinical trial
of octreotide capsules (conditionally trade-named “Mycapssa®”) for
the maintenance treatment of adult acromegaly patients to support a
potential submission of a Marketing Authorization Application to
the European Medicines Agency. Chiasma received a Complete
Response Letter (CRL) from the U.S. Food and Drug Administration
(FDA) on April 15, 2016 regarding its New Drug Application (NDA)
for Mycapssa in the United States. Chiasma is headquartered
in the United States with a wholly-owned subsidiary in
Israel. Mycapssa, TPE and MPOWERED are trademarks of
Chiasma.
Forward-Looking
Statements
This release contains “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, including, but not limited to, its expectation that it
will incur aggregate charges of approximately $0.8 million to $1.0
million for one-time severance and related costs in the third
quarter of 2016; its expectation that this action will be
substantially complete by the end of the current quarter and that
resulting cash charges will be substantially complete by the end of
the first quarter of 2017; its expectation that, when combined with
the June 2016 restructuring plan, it will realize more than $7.0
million in annualized payroll and related expense savings; and its
plans to continue enrolling patients in the MPOWERED Phase 3
trial. Any forward-looking statements in this press release
are based on management’s current expectations of future events and
are subject to a number of risks and uncertainties that could cause
actual results to differ materially and adversely from those set
forth in or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to, the risk
that estimates and assumptions underlying the company’s workforce
reduction, including that its estimated charges and cost savings
may not be realized; risks associated with the regulatory review
and approval process generally; risks associated with Chiasma’s
Phase 3 clinical trial to support regulatory approval of Mycapssa
in the E.U.; risks associated with Chiasma potentially conducting
an additional randomized, double-blind and controlled Phase 3
clinical trial of Mycapssa in accordance with the FDA’s
recommendation in the CRL to support regulatory approval of
Mycapssa in the United States, including risks related to the
enrollment, timing and associated expenses of any potential trial;
risks associated with Chiasma pursuing a development pathway other
than the path strongly recommended by the FDA; risks associated
with obtaining, maintaining and protecting intellectual property;
risks associated with Chiasma’s ability to enforce its patents
against infringers and defend its patent portfolio against
challenges from third parties; the risk that octreotide capsules,
if approved, will not be successfully commercialized; the risk of
competition from currently approved therapies and from other
companies developing products for similar uses; risks associated
with Chiasma’s ability to manage operating expenses and/or obtain
additional funding to support its business activities; risks
associated with Chiasma’s dependence on third parties; and risks
associated with defending any litigation, including the risk that
we incur more costs than we expect and uncertainty involving the
outcome. For a discussion of these and other risks and
uncertainties, and other important factors, any of which could
cause our actual results to differ from those contained in the
forward-looking statements, see the section entitled “Risk Factors”
in Chiasma’s Annual Report on Form 10-K for the year ended December
31, 2015 filed with the Securities and Exchange Commission (SEC) on
March 17, 2016, its Quarterly Report on Form 10-Q for the quarter
ended June 30, 2016 filed with SEC on August 11, 2016 and in
subsequent filings with the Securities and Exchange
Commission. All information in this press release is as of
the date of the release, and Chiasma undertakes no duty to update
this information unless required by law.
Contact:
Cammy Duong
MacDougall Biomedical Communications
(781) 591-3443
cduong@macbiocom.com
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