Chiasma, Inc. (CHMA) Announces Additional 44% Workforce Reduction
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Chiasma, Inc. (NASDAQ: CHMA) announced that it is further reducing its workforce by approximately 44%, primarily in the company’s research and general and administrative functions, to lower its operating expenses and extend its cash runway. This action follows Chiasma’s announcement of a corporate restructuring plan in June 2016, which included an initial workforce reduction composed primarily of the company’s commercial personnel. Chiasma intends to focus its resources on the continued development of Mycapssa® (octreotide) capsules for the maintenance treatment of adult patients with acromegaly.
“We extend our sincere appreciation to those who will be leaving Chiasma for their contributions toward bringing new treatment options to patients,” said Mark Leuchtenberger, president and chief executive officer of Chiasma. “While this decision is extremely difficult, we believe it is the prudent course of action as we seek to conserve our cash and continue our dialogue with the U.S. Food and Drug Administration (FDA) regarding development of Mycapssa.”
Chiasma estimates that it will incur aggregate charges related to the headcount reduction of approximately $0.8 million to $1.0 million for one-time severance and related costs in the third quarter of 2016. These charges are expected to result in cash expenditures that will be substantially complete by the end of the first quarter of 2017. As of June 30, 2016, Chiasma had $115.6 million of cash, cash equivalents and marketable securities.
This action is expected to be substantially complete in the current quarter, and when combined with Chiasma’s previous restructuring plan, will result in a reduction to the company’s workforce of more than 60% since May 1, 2016. The company expects to realize more than $7.0 million in annualized payroll and related expense savings as a result of these combined actions.
Chiasma is retaining a core team of fewer than 25 executive, clinical, regulatory and general and administrative personnel. The company continues to enroll patients in its MPOWERED™ Phase 3 trial comparing the safety and efficacy of Mycapssa to monthly somatostatin analog injections to support a potential Marketing Authorization Application (MAA) with the European Medicines Agency (EMA).
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