February 18, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Newton, Pa.-based Onconova Therapeutics , in an effort to cut costs and hold on to its cash, indicated it is cutting 17 percent of its workforce, including the company’s chief financial officer and president of research and development. The company’s chief executive officer, Ramesh Kumar, has also agreed to cut his base salary by $136,000 this year.
On Feb. 4, Onconova announced that the NASDAQ Stock Market had gave it approval to transfer its listing from the NASDAQ Global Select Market to the NASDAQ Capital Market. Starting on Feb. 5, it was trading under the symbol ONTX. The company indicated in January that it had raised $1.84 million in its direct stock offering to a single institutional investor.
However, as part of today’s story reported by the Philadelphia Business Journal, the NASDAQ Stock Market informed Onconova that it was not in compliance with its $1 minimum bid price requirement for continued listing. Onconova has until Aug. 8, 2016, or 180 calendar days, to become compliant. The company indicated it will monitor its closing bid price and “consider its available options.”
Onconova is a late-stage oncology company. In February 2014, the company stumbled when its drug, Rigosertib, which was being developed for myelodysplastic syndrome in a Phase III clinical trial, failed to show prolonged survival in MDS patients.
The company is now enrolling a subset of MDS patients in a new Phase III trial of Rigosertib.
Also, in December 2015, Onconova announced that it had presented data at the 57th American Society of Hematology (ASH) Annual Meeting from its ongoing Phase I/II clinical trial of oral rigosertib and azacitidine in higher-risk MDS.
“The high response rate observed in the 09-08 combination trial is impressive,” said Lewis Silverman, trial investigator and associate professor of medicine in Hematology and Medical Oncology at the Icahn School of Medicine at Mount Sinai, in a statement. “Furthermore, the tolerability profile of oral rigosertib and azacitidine suggests that this combination could be used in HR-MDS. These results provide strong support for the advancement of oral rigosertib into late-stage clinical trials.”
The cost-cutting is designed to allow the company to continue with its clinical trials. The job cuts, however, will incur a one-time severance-related charge of about $2.8 million in this quarter. Kumar’s salary reduction is from $543,375 to $407,531, and is retroactive to Jan. 1, 2016. Six people, including the two executives, have been laid off. Ajay Bansal is the company’s chief financial officer and Thomas McKearn is the company’s president of research and development. Mark Guerin, the vice president of financial planning and accounting, will take over the duties of chief financial officer.
Onconova is currently trading for $0.48 per share. Shares traded on Dec. 8, 2015 for $1.44, dropped to $0.60 on Jan. 15, 2016, then to $0.44 on Feb. 8.
On Feb. 16, Risers & Fallers noted that two analysts gave Onconova a “buy” rating and one gave it a “neutral” rating.
