Article: dropping hint they may resort to selling themselves
Telesta Therapeutics, Inc. (TSE:TST) Conducts Layoffs after the FDA’s Rejection:
After its cancer drug has been rejected for approval, Telesta Therapeutics, Inc. (TSE:TST), a publicly traded company on the Toronto exchange, is reducing 15% of its payroll in a cost-cutting effort as it works on getting back ontrack.
Telesta Therapeutics has come up with the decision after carefully reviewing its staffing and expenditures. The layoffs will largely affect the company’s manufacturing operation in Montreal. Aside from the layoffs, Telesta Therapeutics is also cutting costs in other significant areas such as internal and consulting expenditures. The company ended 2015 with a total cash of $20.30 million.
FDA’s Rejection
Telesta Therapeutics is trying to recoup after the Food and Drug Administration (FDA) declined its application for the approval of its bladder cancer drug last month, MCNA. Accordingly, the drug did not qualify for and meet the regulatory requirements.
The FDA asked the pharmaceutical company to conduct another Phase III trial to prove that the drug is indeed efficient and safe.
Currently, however, Telesta Therapeutics is still requesting for a Type A meeting with the FDA, in hopes to seek clarity as to what needs to be done to get the coveted approval in both the US and Europe.
Counteracting Losses
According to Michael Berendt, Telesta Therapeutics CEO and Chief Scientist, the company is constantly working with the board of directors on reviewing the strategic options available to protect Telesta’s interests over the coming months. Berendt added that the directors understand that this needs to be done in a timely manner in order to prevent further losses in the company’s cash resources.
Since the rejection of MCNA, Telesta Therapeutics has been dropping hints that it may resort to selling itself. In early February, following the FDA’s decision, Berendt said that the volatility in the financial markets has provided new array of opportunities for “well-capitalized companies”.
Last year, Telesta Therapeutics sold its MCNA European rights to France-based pharmaceutical company Ipsen SA (EPA:IPN). Under the deal, the former received an upfront payment worth $10 million. If MCNA gets the approval, Telesta Therapeutics is looking to an additional $127 million from Ipsen.