Unknown Number of Employees Impacted as ESSA Pharma Restructures and Refocuses R&D
Published: Sep 11, 2017
September 11, 2017
By Alex Keown, BioSpace.com Breaking News Staff
VANCOUVER – Shares of Essa Pharma Inc. have plunged more than 42 percent this morning after the company announced its research and development efforts will undergo a restructuring and is scrapping a Phase I program
The company made the decision despite reporting its Phase I drug candidate EPI-506 was well tolerated and had a favorable safety profile. EPI-506, an N-terminal domain inhibitor of the androgen receptor (AR-NTD), is being developed as a treatment for of end-stage patients with metastatic castration-resistant prostate cancer (mCRPC) who have failed existing treatments including abiraterone or enzalutamide, or both, and may have also received one prior line of chemotherapy.
Despite that favorable profile, the company is scrapping the EPI-506 program, which may indicate efficacy was not be what company leadership was envisioning. Essa said it was making a strategic decision to switch focus from the development of EPI-506 in favor of the company’s next-generation NTD inhibitors. The NTD inhibitors offers “the most compelling regulatory and commercial pathway” the company said this morning.
That news was not welcome by investors who began dumping the stock, sending it to a low of 26 cents per share this morning. Investors have not been happy with the company much of the summer. In June, company share prices plunged more than 60 percent following a poster presentation for EPI-506 at the American Society of Clinical Oncology in June.
David Parkinson, president and chief executive officer of Essa, said the company’s NTD inhibitors, which it calls Aniten, are structurally similar to EPI-506. Additionally, Parkinson said the Anitens have the potential to deliver “increased potency and an improved pharmacological profile,” which means the product platform represents a “more favorable value proposition.”
“We look forward to shifting our focus to advance the Company's promising Aniten program,” Parkinson said.
That shifting of priorities though is expected to cost the company a lot of money and result in the termination of an unknown number of employees. Additionally it will cost the company approximately $7 million. The company closed out its latest quarter with $7.3 million in cash and cash equivalents, according to its financial report. The company said it has resources to continue operations through the fourth quarter of this calendar year. Parkinson did not specify what the company will do to continue operations following the fourth quarter. The company could seek to sell off the EPI-506 asset or other assets it may have. There was also no indication regarding repayment of a secured $10 million loan the company took on in 2016. In August the company said $8 million had been “drawn down” and $2 million remains for use. The company also received $5.2 million from Cancer Prevention Research Institute of Texas in January of this year.