Troubled Cempra Slashes 67 Percent of Workforce
February 28, 2017
By Alex Keown, BioSpace.com Breaking News Staff
CHAPEL HILL, N.C. – Antibiotic drugmaker Cempra Inc. (CEMP) will terminate 67 percent of its employees following the U.S. Food and Drug Administration’s rejection of solithromycin, an oral and intravenous drug being evaluated for the treatment of community-acquired bacterial pneumonia (CABP) in adults.
This morning, the company said the delay in approval of solithromycin forced the termination as Cempra has been forced to undergo a reduction of costs. Cempra said its workforce will be reduced from 136 people to 45 employees. The cost reduction will also impact external spending related to commercial preparedness and non-essential activities, the company said in a statement.
“The principal objective of the reductions is to enable us to conserve our financial resources as we evaluate the best path forward with our existing pipeline and potential business development opportunities,” Cempra said.
In December, Cempra received a Complete Response Letter from the FDA indicating the drug could not be approved in its current form and requested more clinical safety data. The FDA raised a concern regarding insufficient characterization of hepatotoxicity. Cempra leadership met with the FDA earlier this month to discuss the CRL and determine how to move forward. Cempra said it is developing a protocol that would address the safety concerns. If the FDA approves the plan, Cempra said it will require non-dilutive funding to conduct the study. Not only has the FDA balked at approving solithromycin without additional safety data, Cempra said the European Medicines Agency is also seeking additional data before it approves marketing authorization.
In addition to CABP, solithromycin is being studied for a number of other potential indications, including gonorrhea and Nonalcoholic steatohepatitis (NASH).
It hasn’t all been bad news though for Cempra. On Feb. 24, the company announced positive topline results from a Phase III study of oral fusidic acid in 716 patients with acute bacterial skin and skin structure infections. The company is planning to meet with the FDA regarding fusidic acid to discuss the steps required to bring the drug to market.
“We have made substantial progress in recent weeks to clarify our existing clinical programs, including positive phase 3 results with fusidic acid, further define the next steps to advance solithromycin, and take significant cost-reduction actions to preserve our sizable cash resources as we evaluate the best investments, including potential external opportunities, to deliver value to patients and shareholders,” David Zaccardelli, acting chief executive officer of Cempra, said in a statement.
In addition to the termination of employees, Cempra reported a net loss of $31.4 million for the fourth quarter, which ended Dec. 31, 2016. The company also saw a loss of $118 million for the full year of 2016. As of December 31, 2016, Cempra had cash and equivalents of $231.6 million and 52.4 million shares outstanding.
Shares of Cempra have plunged more than 19 percent this morning. The stock is currently trading at $3.38 as of 10:30 a.m.