Struggling Telesta Cuts Another 30% of Workforce
Struggling Telesta Cuts Another 30% of Workforce, Will Shutter Montreal Facility
By Alex Keown, BioSpace.com Breaking News Staff
MONTREAL – Following the U.S. Food and Drug Administration’s rejection of its bladder cancer drug MCNA, Canada-based Telesta Therapeutics (TSX:TST) said it will terminate the drug project, shutter its Montreal-based manufacturing facility and terminate another 30 percent of its workforce.
In February, the FDA issued Telesta a Complete Response Letter regarding its Biologics License Application for MCNA. In the letter, federal regulators said the company would need to run another Phase III trial to further study MCNA’s safety and efficacy. Following an April meeting with the company, the FDA said Telesta would not benefit from any form of accelerated approval and would need to undertake a full Phase III process – a process that Telesta maintained could take an additional five years. As a result, Telesta said it was terminating the MCNA program, which includes the termination of a partnership with the French-pharmaceutical company, Ipsen (IPN.PA).
“Telesta has determined that there is no reasonable assurance that a development partner in any region of the world can be found for MCNA in the short term. As such, Telesta will cease to expend any significant effort or funds to find a partner or further develop this asset…,” the company said in a statement this morning.
Telesta said it will seek a buyer for its Montreal facility, but at the same time will keep employees at two additional manufacturing facilities while the company seeks ways to monetize them. Since the FDA rejection of MCNA, Telesta has reduced its staff from a high of 50. The latest workforce reduction will leave Telesta with 15 full-time employees. Four of those will be split between the two additional facilities, the company said. The two sites are in Ontario and another Montreal location. The company said it will take its time to find the right buyer in order to garner the best price for shareholders.
Telesta will now focus on the disposition of its non-core assets. However, the board of directors said an outright sale of the company will not provide a “return that is meaningfully different from current price levels.” In order to find the best use of its funds, Telesta said it has several options, including the acquisition of “clinical or near-clinical assets” and review acquisition and merger opportunities that “could provide significant upside for Telesta shareholders.” Telesta said it will provide additional information regarding its current finances and monthly operational burn when it releases its quarterly and annual reports next month.