Bedford, Massachusetts-based Ocular Therapeutix Inc (NASDAQ:OCUL) said it will be laying off 26 people as it looks to restructure after the Food and Drug Administration (FDA) rejected its lead drug candidate. The layoffs translate into 20% of the company’s workforce.
august-4-816332598-ocular-therapeutix-axe-26-fda-rejects-lead-drugThe company said in a filing with the U.S. Securities and Exchange Commission that the layoffs will come from across the entire organization. Chief commercial officer Andy Hurley is among those leaving.
The company expects to complete the restructuring in the third quarter and record a charge of $1.5 million. This charge includes severance, benefits, and other related costs.
The company continues to review the potential impact of the restructuring and is unable to estimate any additional costs or charges at this time.
With the savings that come from the job cuts, Ocular now has enough cash to get it through the third quarter of 2018. The company plans to use its remaining resources to focus on its existing pipeline. This includes its drug delivery device “Dextenza,” a steroid that treats pain and inflammation after eye surgery.
In July, the FDA rejected the device, citing manufacturing problems discovered during an inspection in May which caused some batches to become contaminated. The FDA did not say there were any safety or efficacy concerns. Ocular has responded to the manufacturing problems found by the FDA.
To add insult to injury, angry shareholders filed three different federal lawsuits against the company. Two complaints, one filed in New Jersey federal court and the other filed in Boston, accuse Ocular of downplaying and concealing the full extent of the manufacturing problem before it was reported on in the news.
During the company’s first quarter earnings call, Eric Ankerud said the FDA asked the company to address a “particular matter issue.” Ankerud said the problem would be resolved, saying “We feel quite comfortable that we have the situation under control.”
On the same call, company CEO Amar Sawhney told listeners that, “We think these are resolvable issues, and we have responses.”
On August 1, Ocular officially announced that Antony Mattessich started as the new CEO of Ocular. As already noted, his first move as the top executive was to eliminate the company’s workforce by approximately 20%.
Sawhney has transitioned to executive chairman of Ocular.
Ocular is scheduled to give investors another corporate update when it announces second-quarter earnings on August 8.
“Form 8-K,” Securities And Exchange Commission, last accessed August 3, 2017.
“Ocular Therapeutix Receives Complete Response Letter from FDA for DEXTENZA NDA,” Ocular Therapeutix, July 11, 2017.
“Ocular Therapeutix Announces Executive Transition Plans,” Ocular Therapeutix Inc, June 22, 2017.