Recro Pharma to Lay Off 50 Following Second FDA Rejection for Non-Opioid Pain Treatment

Malvern, Penn.-based Recro Pharma will terminate approximately 50 employees of its Acute Care Segment. The cuts came less than two weeks after the company received a Complete Response Letter from the U.S. Food and Drug Administration (FDA) for its non-opioid pain medication, IV meloxicam.

In its announcement this week, Recro said the headcount reduction will not affect its contract development and manufacturing segment, which continues to provide positive cash flow for the company. Recro said the cuts and related charges associated with the restructuring move will significantly reduce the company’s cash burn for the year. Recro said it anticipates its cash flow will break even in the third quarter.

Recro Chief Executive Officer Gerri Henwood said the company has faced challenges in trying to move its pain medication meloxicam through the regulatory process. In order to ensure the preservation of shareholder value, Henwood said it was necessary to make the difficult decisions regarding the job cuts.

“We continue to believe that IV meloxicam would be an attractive non-opioid pain management candidate for the hospital marketplace, and we believe it will ultimately be approved by FDA,” Henwood said in a statement.

In March, the FDA issued the CRL to Recro, the second time the regulatory agency has had concerns about the treatment. That was the second CRL issued by the FDA for IV meloxicam. After the first CRL, Recro resubmitted its New Drug Application to the FDA in September 2018.

In the CRL, the FDA raised concerns about the “onset and duration of IV meloxicam,” Recro said in March. The FDA noted that the “delayed onset fails to meet the prescriber expectations for intravenous (IV) drugs.” Additionally, the CRL cited concerns about the Recro drug’s role as a monotherapy in acute pain and how well it would meet the needs of patients and prescribers in that setting. Recro said it strongly disagreed with the FDA’s interpretation of the clinical data and plans to meet with the agency to discuss a path forward for the medication. The company also plans to seek out a strategic partner for the commercialization of IV meloxicam.

“We remain steadfast in our belief that IV meloxicam holds significant potential as a treatment option for moderate to severe pain in multiple clinical settings and remain committed to pursuing a path to regulatory approval... We intend to work closely with the FDA to determine the best path forward to obtain approval for IV meloxicam,” Henwood said in a statement at the time the CRL was issued.

After the CRL was issued, shares of Recro Pharma plunged from $9.72 to $5.79. However, the stock has rebounded since the CRL was issued to close at $8.34 on Thursday.