Theratechnologies (THER) to Stop COPD Program, Reduce Headcount by 60%
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Theratechnologies (Nasdaq: THER) to discontinue COPD clinical program, "downsizing and accelerating its path to profitability." The Company now aims to be profitable in 2013.
"We are on track to reach our year-end target of 3,000 to 3,500 new prescriptions in the U.S. for EGRIFTA(R), as announced earlier in the year. However, given the recent increase in uncertainty in financial markets, we have decided to accelerate our path to profitability," stated John-Michel T. Huss, President and CEO of Theratechnologies. "With patient enrolment still in its early stages, now is the time to discontinue our COPD program," added Mr. Huss.
As a result of today's announcement, there will be a 60% workforce reduction or approximately 40 positions.
The Company will now focus its efforts on tesamorelin's significant potential for the treatment of excess abdominal fat in HIV patients with lipodystrophy. Currently, applications for this indication are under review with regulatory agencies in Europe, Argentina, Brazil, Canada, Israel and Mexico. The Company will also accelerate the development of a second generation growth hormone releasing factor for a broad range of potential medical indications and using new, more patient-friendly methods of administration.
Theratechnologies estimates that today's announcement will translate into cost savings of approximately $10 million in 2012. The Company estimates that the program would have required a total investment of approximately $90 million over the next four years.
Following this decision, Theratechnologies currently estimates that it will incur charges of approximately $3 million related to severance costs and the termination of the clinical trial.
Theratechnologies expects to register these charges in fiscal 2012.
The Board has unanimously approved these decisions at a regular Board Meeting held yesterday.
To demonstrate its commitment to these decisions, the Board aims to lower its costs by approximately 50%. This will be achieved by reducing the number of committees, lowering remuneration fees and the number of members.
In addition, Mr. Jean de Grandpre, who had previously expressed his intention to retire by the end of the year, confirmed his decision.
His retirement is effective immediately.
"We are on track to reach our year-end target of 3,000 to 3,500 new prescriptions in the U.S. for EGRIFTA(R), as announced earlier in the year. However, given the recent increase in uncertainty in financial markets, we have decided to accelerate our path to profitability," stated John-Michel T. Huss, President and CEO of Theratechnologies. "With patient enrolment still in its early stages, now is the time to discontinue our COPD program," added Mr. Huss.
As a result of today's announcement, there will be a 60% workforce reduction or approximately 40 positions.
The Company will now focus its efforts on tesamorelin's significant potential for the treatment of excess abdominal fat in HIV patients with lipodystrophy. Currently, applications for this indication are under review with regulatory agencies in Europe, Argentina, Brazil, Canada, Israel and Mexico. The Company will also accelerate the development of a second generation growth hormone releasing factor for a broad range of potential medical indications and using new, more patient-friendly methods of administration.
Theratechnologies estimates that today's announcement will translate into cost savings of approximately $10 million in 2012. The Company estimates that the program would have required a total investment of approximately $90 million over the next four years.
Following this decision, Theratechnologies currently estimates that it will incur charges of approximately $3 million related to severance costs and the termination of the clinical trial.
Theratechnologies expects to register these charges in fiscal 2012.
The Board has unanimously approved these decisions at a regular Board Meeting held yesterday.
To demonstrate its commitment to these decisions, the Board aims to lower its costs by approximately 50%. This will be achieved by reducing the number of committees, lowering remuneration fees and the number of members.
In addition, Mr. Jean de Grandpre, who had previously expressed his intention to retire by the end of the year, confirmed his decision.
His retirement is effective immediately.
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