NeurogesX, Inc. Cans 8 of 11 Employees, Looks for Buyer

Published: Mar 11, 2013

NeurogesX Inc. cut eight of its 11 employees and is seeking a buyer for its pain patch Qutenza. Only three executives remain at the San Mateo company (OTCBB: NGSX) — President and CEO Ron Martell, COO Stephen Ghiglieri and Chief Medical Officer Stephen Peroutka — that only a few years ago had more than 100. NeurogesX stock traded for 18 cents per share at the end of Thursday. It had traded as high as $10.60 per share in April 2010 but has been under a dollar since early 2012. The reorganization and potential sale of the company could have a ripple effect, since it cut a deal in 2010 with HealthCare Royalty Partners. NeurogesX received $40 million in exchange for Cowen getting royalties from Qutenza sales in Europe, the Middle East and Africa by partner Astellas Pharma. Cowen was set to get 5 percent of royalties above $90 million until it received a total of $106 million. Although NeurogesX built its own U.S. sales force leading up to Qutenza's April 2010 launch, sales of the roughly $700 pain patch apparently never matched the company's hopes for its highly concentrated synthetic form of capsaicin, the active ingredient in chili pepper. Through the first nine months of last year, NeurogesX recorded revenue of $8.9 million, including $583,000 in U.S. sales in the third quarter, compared with $8.5 million in the same period of 2011.

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