Jul 16 2011
Transcept Pharmaceuticals, Inc. (Nasdaq: TSPT) announced today plans to reduce operating expenses by eliminating approximately 45% of its workforce following notification from the U.S. Food and Drug Administration (FDA) that the resubmitted New Drug Application (NDA) for Intermezzo
® (zolpidem tartrate sublingual tablet), the company's lead product candidate, cannot be approved in its present form. Intermezzo
® is being developed for use as-needed in the treatment of insomnia when a middle-of-the-night awakening is followed by difficulty returning to sleep.
Glenn A. Oclassen, President and Chief Executive Officer commented, "Our staffing needs have changed after the recent news from the FDA on the regulatory status of Intermezzo®. We are therefore phasing out certain positions that are non-essential to our plan to pursue potential paths forward with the FDA on the Intermezzo® NDA, and to continue development of our TO-2061 program. This cost containment step is consistent with our long standing principle of conservative cash management."
Mr. Oclassen continued, "This decision was a difficult one for all of us and was made all the more challenging by the high quality of the people affected. We are extremely grateful to our all employees for their significant efforts and contributions to Transcept."
As previously announced, Transcept had cash, cash equivalents and marketable securities of approximately $59.6 million at June 30, 2011. Cash use during the quarter ended June 30, 2011 averaged approximately $1.2 million per month.
Transcept expects to record a restructuring charge of approximately $1.1 million in the third quarter of 2011, representing severance and benefit continuation expenses, the majority of which will be paid in the third quarter of 2011. Transcept also expects to record a stock compensation charge associated with the modification of certain stock options in connection with the restructuring that will be determined and recorded in the third quarter of 2011. Transcept expects the organizational change will reduce current annualized payroll and benefit expenses by approximately $2.1 million.
Transcept Pharmaceuticals, Inc.