Egalet Cuts Workforce By 40% in Expense Reduction Plan
Published: Aug 10, 2017
August 10, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Wayne, Penn. – During its second-quarter financial reporting, Egalet Corporation also announced it plans to cut its non-sales staff by almost 40 percent.
Egalet focuses on tamper-proof drugs to treat acute and chronic pain that cuts the chance of prescription opioid abuse. Despite the plans to reduce staff, the company reported a healthy quarter, with net revenue growing to $6.3 million, an 81 percent increase over the same period from last year and a 15 percent improvement over this year’s first quarter.
The company reported that its SPRIX (ketorolac tromethamine) Nasal Spray prescriptions grew by 20 percent in the first quarter, adding 555 new prescribers, and OXAYDO (oxycodone HCL, USP) tablets increased by 17 percent, adding 369 prescribers from the first quarter to the second quarter. The company also closed on a $30 million equity financing and partnered with Ascend Therapeutics to co-promote SPRIX Nasal Spray to women’s healthcare practitioners.
The job cuts are related to what the company says is “part of an effort to prioritize projects.” The company employs about 150 people, 87 involved in sales and marketing. About 25 people will lose their jobs in the restructuring.
Egalet expects that, after the cuts, it has enough cash, cash equivalents and marketable securities to fund operations into 2020. At the end of the second quarter it had $87.9 million in cash, excluding the $28.6 million it picked up from its July 6, 2017 public offering of common stock and warrants. General and administrative expenses rose to $12.5 million for the second quarter from $8.9 million from the end of the quarter in 2016. The increase is attributed to post-marketing costs after the U.S. Food and Drug Administration (FDA) approved ARYMO ER.
Sales and marketing expenses also increased to $9.3 million for the second quarter from $6.3 million from the same period in 2016. This was largely due to expansion of the company’s commercial operations and the expenses related to launching ARYMO ER. Research-and-development expenses dropped to $4.6 million in the second quarter from $8.7 million the previous year, attributed to decreased costs to develop Egalet-002, ARYMO ER and OXAYDO.
“We believe our 15 percent net revenue growth in the second quarter of 2017 over the first quarter demonstrates our continued commitment to commercial execution and the benefits of our products to health care professionals and the patients they treat, and represents our strongest quarter to date, with $6.3 million net revenue realized,” said Bob Radie, Egalet’s president and chief executive officer, in a statement. “In addition, we are announcing an expense reduction plan that includes a corporate restructuring that we expect will significantly decrease the operating expenses that do not directly support the growth of our commercial business. While we have had to make some tough decisions, we believe these are the right steps to support our commercial focus.”
Egalet’s proprietary Guardian technology uses physical and chemical barriers that make it more difficult to manipulate the opioid pills. In other words, they are harder to cut, crush or grind. Also, if the drugs are combined with a liquid, the Guard technology turns the drug into a gel, which makes it more difficult to inject.