MONTREAL, QUEBEC—In keeping with what seems to be a growing,and unfortunate, trend, Theratechnologies Inc. has announced thediscontinuation of one of its clinical programs and a resulting reduction inworkforce.
Theratechnologies will discontinue its muscle wasting inchronic obstructive pulmonary disease (COPD) clinical program in an attempt todownsize and increase profitability. As a result of the programdiscontinuation, 60 percent of the company's workforce, approximately 40positions, will be cut. John-Michel T. Huss, President and Chief ExecutiveOfficer of Theratechnologies, noted that he wished to "thank all affectedemployees for their valuable contributions," adding that the decision "was nottaken lightly and is in no way a reflection of the quality of their work."
"We are on track to reach our year-end target of 3,000to 3,500 new prescriptions in the U.S. for EGRIFTA, as announced earlier in theyear. However, given the recent increase in uncertainty in financial markets,we have decided to accelerate our path to profitability," Huss said in apress release. "With patient enrolment still in its early stages, now isthe time to discontinue our COPD program."
Theratechnologies' COPD program has completed itspreclinical and Phase I stages, and is in the early stages of Phase II. Musclewasting related to COPD, the company notes on its site, is "a decrease orthinning of the muscle mass…associated with several abnormalities, includingimpaired exercise capacity and functioning and decreased muscle strength." Itis "a common symptom in patients with moderate to severe COPD," the site adds,and is "an independent predictor of a COPD patient's functional deteriorationand mortality." Theratechnologies was investigating tesamorelin, a stabilizedanalogue of the growth hormone-releasing factor that induces growth hormoneproduction, as a treatment for this issue.
Tesamorelin is the focus of another therapy byTheratechnologies in Egrifta, tesamorelin as an injection for the treatment ofHIV-associated lipodystrophy, or changes of fat distribution in the body.Lipodystrophy can lead to abnormalities in body shape and excess abdominal fataccumulation, which tesamorelin is expected to treat by reducing visceral fat. Theratechnologieswill be focusing its efforts on this indication for the compound, which iscurrently under review with regulatory agencies in Europe, Canada, Mexico,Brazil, Israel and Argentina. The company will also accelerate the developmentof a second-generation growth hormone releasing factor for a range of potentialmedical indications.
Theratechnologies estimates that the program discontinuationand workforce reductions will result in cost savings of approximately $10million in 2012. The COPD program was estimated to have required an investmentof approximately $90 million over the next four years. Factoring in severancecosts and the termination of the clinical trial, the company expects charges ofapproximately $3 million, which will be registered in fiscal 2012.
The decisions were approved unanimously byTheratechnologies' board of directors, which is also aiming to lower its costsby approximately 50 percent through a reduction in the number of committees,number of members and a decrease in remuneration fees.
SOURCE: Theratechnologies press release
