September 16, 2015
By Alex Keown, BioSpace.com Breaking News Staff
RANCHO CORDOVA, Calif. – Cesca Therapeutics Inc. will eliminate 15 employees as part of a restructuring initiative to reduce costs associated with the cord blood banking business and the Phase III clinical trial for no option critical limb ischemia (CLI) patients, the company announced this morning.
Cesca, which focuses on regenerative therapies, said the restructuring will cost the company about $245,000 this quarter, which includes one-time termination benefits principally comprised of severance payments. However, Cesca expects the restructuring will save the company approximately $3.3 million in the cord blood banking business. In addition to cost reductions, the restructuring will result in the elimination of 15 positions, the company said. Additionally, the company said a number of open positions will not be filled.
“The purpose behind this restructuring was to enhance our ability to differentially invest in the clinical programs which we view as the principal vehicles for stockholder value creation going forward. Our intent has been to free up capacity without jeopardizing our ability to support our existing customers and sustain our traditional cord blood banking business,” Robin C. Stracey, Cesca’s chief executive officer, said in a statement.
The restructuring and layoffs come about two weeks after the company raised $15 million in financing from the Institutional Life Sciences Fund. The company said it planned to use the funding in support of ongoing clinical initiatives.
Cesca has had a transitional 2015 with staff turnover, a new chief executive officer and issues with the NASDAQ exchange. In May, Dan T. Bessey resigned as chief financial officer to accept a new position at another company and in June, Cesca appointed Stracey as the company’s new chief executive officer. Stracey had been serving as interim CEO since 2014. Although it has since been cleared up, in May Cesca received a non-compliance notice from the U.S. Securities and Exchange Commission for failure to file its quarterly Form 10-Q. That was the second notice the company received from the SEC. It also received one in December for failing to file its Form 10-Q then.
Earlier this year, the company also began to pivot from being a medical device company to focus on regenerative therapies.
Cesca’s automated blood and bone marrow processing systems enable the separation, processing and preservation of cell and tissue therapy products. Some of the products include SurgWerks, a proprietary stem cell therapy point-of-care kits for the treatment of vascular and orthopedic indications and The AutoXpress, a proprietary automated device, along with companion sterile blood processing disposables, for the harvesting of stem cells from cord blood. Cesca’s Phase III trial, recently approved by the U.S. Food and Drug Administration (FDA), will use the SurgWerks system for the treatment of “no option” patients with late stage CLI.
