Theratechnologies is discontinuing its muscle wasting in 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 chief executive officer 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, 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 (GRF) for a broad range of potential medical indications and using new, more patient-friendly methods of administration.
The clinical program evaluating tesamorelin in muscle wasting associated with chronic obstructive pulmonary disease (COPD) was initiated in February 2011. The phase II clinical trial was launched in September 2011 and was still in the early stages of enrolling patients. Lead investigators have been notified that the program has been discontinued.
The company estimates that this decision 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.
Theratechnologies estimates that it will incur charges of approximately $3 million related to severance costs and the termination of the clinical trial.