April 6, 2016
By Alex Keown, BioSpace.com Breaking News Staff
VANCOUVER – RepliCel Life Sciences, Inc. will undergo a restructuring that includes downsizing all non-critical programs and staff to preserve capital that will allow the company to support the company’s clinical trials pipeline.
The news sent RepliCel’s stock down more than 6 percent this morning. Shares are trading at 14 cents, down from Tuesday’s closing price of 20 cents per share. Since last April, RepliCel’s stock has been on a steady decline. In April 2015, shares were trading at 55 cents per share, the highest mark of the past year.
RepliCel’s product pipeline includes two ongoing clinical trials, RCT-01 for tendon repair and RCS-01 for skin rejuvenation. RepliCel also has hair restoration product RCH-01 in its pipeline. That drug is under exclusive license by Shiseido Company for certain Asian countries. RepliCel is anticipating results from these clinical trials by the end of 2016.
The company did not specify how many employees would be terminated as a result of the restructuring, nor which departments the cuts would primarily impact. The downsizing might be seen as a setback for a company that was selected as one of Canada’s top 20 technology companies for 2015. The company was selected by the Canadian Innovation Exchange based on “business model, depth of management, market opportunity and quality of product(s) offered,” the company announced in November.
The restructuring plan comes shortly after RepliCel’s appointment of Lee Buckler as the new chief executive officer. Buckler was tapped in December to succeed former CEO David Hall who retired at the end of 2015. Before taking the company top-spot, Buckler served as RepliCel’s vice president of business and corporate development since October 2014.
Buckler said he and other senior executives have worked on the restructuring plan and have reduced company monthly expenses by 60 percent.
“With this reduced burn rate, we now require much less capital to get us to milestones which represent material value inflection points and we are confident we will be able to finance the company to critical milestones expected to lead to a licensing transaction,” Buckler said in a statement.
While RepliCel is cutting expenses, the company announced it closed a financing deal that raised $377,525. RepliCel said it brokered a private placement of 1,887,625 shares at a price of $0.20 per share. Five investors participated in the financing including Board Chairman and former CEO, David Hall. Proceeds of the financing round are expected to be used for clinical trials and general working capital to finance the scaled-back operation focusing on the Critical Interim Priorities outlined in management’s plan, the company said.
In October RepliCel also financed a private placement of stock that generated $2 million in revenue for the company. Revenue generated from that deal was also slated to be used to support clinical trial operations, the company said at the time.
