Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 20, 2023

Societal CDMO, Inc.

(Exact name of registrant as specified in its charter)

Pennsylvania	001-36329	26-1523233
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1 E. Uwchlan Ave, Suite 112
Exton, Pennsylvania		19341
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (770) 534-8239

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of exchange on which registered
Common Stock, par value $0.01		SCTL		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.05

Costs Associated with Exit or Disposal Activities.

On September 20, 2023, Societal CDMO, Inc. (the “Company”) announced a strategic restructuring plan, and corresponding reduction in workforce, aimed at streamlining and optimizing the Company’s operations. The restructuring plan includes a reduction in the Company’s workforce of 26 current employees and nine open positions, a significant majority of which work to support earlier-stage services, which are most acutely affected by the current financing environment. The Company expects this workforce reduction to result in annualized savings to the Company of approximately $5.5 million.

The Company estimates that it will incur approximately $1 million of one-time costs, most of which are expected to be cash expenditures, primarily in connection with the reduction in workforce related to severance pay and other related termination benefits. The Company communicated the workforce reduction on September 20, 2023 and expects the majority of the costs to be incurred during the quarter ending September 30, 2023. The estimate of costs that the Company expects to incur, and the timing thereof, are subject to a number of assumptions, and actual results may differ materially from these estimates. The Company may also incur other cash or non-cash charges or cash expenditures not currently contemplated due to events that may occur as a result of, or in association with, the actions described above.

Item 7.01

Regulation FD Disclosure.

On September 20, 2023, the Company issued a press release announcing the strategic restructuring plan and the appointment of Wayne B. Weisman as Executive Chairman of the Company’s Board of Directors. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 7.01, including Exhibit 99.1, is being furnished solely to satisfy the requirements of Regulation FD and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Forward-Looking Statements

This Current Report on Form 8-K contains “forward-looking” statements, including, without limitation, statements related to the estimated costs associated with severance pay and other related termination benefits and the expected timing of such costs. Any statements contained in this Current Report on Form 8-K that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based upon the Company’s current expectations. Forward-looking statements involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the Company’s ability to implement, and realize the expected benefits of, the restructuring plan as currently anticipated, the impact of the workforce reduction on the Company’s business operations and reputation, retaining skilled and motivated personnel, costs of restructuring, expected future balances of cash, cash equivalents and short-term investments and unanticipated charges not currently contemplated that may occur as a result of the restructuring plan. The Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2023, Quarterly Reports on Form 10-Q, filed with the SEC on May 10, 2023 and August 14, 2023, and its other filings made with the SEC from time to time contain under the heading, “Risk Factors,” a more comprehensive description of risks to which the Company is subject. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

The following exhibit is being furnished herewith:

Exhibit No.		Document
99.1		Press Release of Societal CDMO, Inc., dated September 20, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Societal CDMO, Inc.

	By:	/s/ J. David Enloe, Jr.
	Name:	J. David Enloe, Jr.
	Title:	President and Chief Executive Officer

Date: September 20, 2023

Exhibit 99.1

Contacts:

Stephanie Diaz (Investors)	Tim Brons (Media)	Ryan D. Lake (CFO)
Vida Strategic Partners	Vida Strategic Partners	Societal CDMO
415-675-7401	415-675-7402	770-531-8365
sdiaz@vidasp.com	tbrons@vidasp.com	ryan.lake@societalcdmo.com

Societal CDMO announces corporate restructuring

Strategic Realignment Designed to Right Size Organization to Address Macro Pharma Market Financing Challenges and Increase Operational Efficiency in Areas of Historical Strength

SAN DIEGO, CA, and GAINESVILLE, GA – September 20, 2023 — Societal CDMO, Inc. (“Societal CDMO”; NASDAQ: SCTL), a contract development and manufacturing organization (CDMO) dedicated to solving complex formulation and manufacturing challenges primarily in small molecule therapeutic development, today announced a strategic restructuring plan to streamline and optimize operations.

Following the completion of a comprehensive review of its operations, Societal has reduced its workforce by 26 positions (9%) across all aspects of the business, effective September 20, 2023. It also has eliminated nine open positions. These moves are expected to result in annualized savings of approximately $5.5 million. A significant majority of the cuts will impact the portion of the business supporting earlier-stage services, which are most acutely affected by the current financing environment.

“Our executive team, in collaboration with our board of directors, has executed a careful review of our current operations and resources and determined that this strategic realignment is essential at this time. Industry-wide funding challenges, which are particularly impacting early-stage drug development, dictate that we reduce our infrastructure in areas that support companies most affected by this slowdown. Taking these difficult but important steps will enable us to increase our operational efficiency, especially in areas that historically have been our greatest strengths. Additionally, this restructuring will bolster our ability to achieve our growth strategies and continue to deliver on our commitment to playing a key role in bringing important medicines to patients,” said David Enloe, chief executive officer of Societal CDMO. “We are deeply appreciative of the tireless commitment of all our team members, and extend a heartfelt thank you for the essential contributions made by those that are impacted by this restructuring.”

To further support this organizational realignment, Societal has appointed Wayne Weisman, our current chairman, as executive chairman of the board of directors. Appointing Mr. Weisman as executive chairman will enable him, along with the support of the board, to provide more direct oversight on the implementation and execution of the corporate strategy.

“I am pleased to assume the role of executive chairman and further support our management as it navigates today’s challenging financial environment. I, as well as the other members of the Societal board of directors, have an excellent working relationship with our management team, and I appreciate the opportunity to expand our engagement on these strategic matters,” stated Mr. Weisman.

About Societal CDMO

Societal CDMO (NASDAQ: SCTL) is a bi-coastal contract development and manufacturing organization (CDMO) with capabilities spanning pre-Investigational New Drug (IND) development to commercial manufacturing and packaging for a wide range of therapeutic dosage forms with a primary focus in the area of small molecules. With an expertise in solving complex manufacturing problems, Societal CDMO is a leading CDMO providing therapeutic development, end-to-end regulatory support, clinical and commercial manufacturing, aseptic fill/finish, lyophilization, packaging and logistics services to the global pharmaceutical market.

In addition to our experience in handling DEA controlled substances and developing and manufacturing modified-release dosage forms, Societal CDMO has the expertise to deliver on our clients’ pharmaceutical development and manufacturing projects, regardless of complexity level. We do all of this in our best-in-class facilities, which total 145,000 square feet, in Gainesville, Georgia and San Diego, California.

Societal CDMO: Bringing Science to Society. For more information about Societal CDMO’s customer solutions, visit societalcdmo.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward looking statements include, but are not limited to, statements regarding the anticipated cost savings of the restructuring. The words “anticipate”, “believe”, “could”, “estimate”, “upcoming”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will” and similar terms and phrases may be used to identify forward-looking statements in this press release. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Factors that could cause the company’s actual outcomes to differ materially from those expressed in or underlying these forward-looking statements include risks and uncertainties associated with realizing the expected benefits of the restructuring plan in a timely manner, or at all, potential negative impacts of the restructuring on the Company’s business operations and reputation, retaining skilled and motivated personnel, costs of restructuring and expected future balances of cash, cash equivalents and short-term investments These forward-looking statements should be considered together with the risks and uncertainties discussed in our filings with the Securities and Exchange Commission (SEC), including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the SEC and available at www.sec.gov. These forward-looking statements are based on information currently available to us, and we assume no obligation to update any forward-looking statements except as required by applicable law.

Cover	Sep. 20, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 20, 2023
Entity File Number	001-36329
Entity Registrant Name	Societal CDMO, Inc.
Entity Central Index Key	0001588972
Entity Tax Identification Number	26-1523233
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	1 E. Uwchlan Ave, Suite 112
Entity Address, City or Town	Exton
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19341
City Area Code	(770)
Local Phone Number	534-8239
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01
Trading Symbol	SCTL
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false