Chiasma cuts staff by 33% after FDA rejects rare disease drug, Mycapssa
pharmafile | June 16, 2016 | News story | Research and Development, Sales and Marketing | FDA, chiasma, cutbacks, failure, workforce cuts
US-based biopharmaceutical company, Chiasma (NASDAQ: CHMA), has announced substantial job cuts as it attempts to restructure following the US Food and Drug Administration’s (FDA) rejection of Mycapssa (octreotide), a treatment for a rare disfiguring disease called acromegaly.
Acromegaly is an extremely rare disease, that is hard to diagnose in its early stages, that results when the anterior pituitary gland produces excess growth hormone after epiphyseal plate closure at puberty. It can cause severe disfigurement, especially in the face.
Mycapssa is an investigational new drug for the treatment of the disease. It has been granted orphan designation in the US and EU, but has not yet been approved for use in any jurisdiction. The FDA issued a complete response letter rejecting the drug in April, indicating that Chiasma had not provided substantial evidence of efficacy to warrant approval.
As part of its plan to secure approval for the Mycapssa, Chiasma has restructured by cutting its workforce by 33%, including substantially all of its commercial personnel. The company expects to incur between $1.4 million to $1.6 million for one-time severance and related costs in the second quarter of 2016.
Going forward the company plans to prove the efficacy of the drug with the Phase III MPOWERED trial, and explore all possible options to secure approval including additional clinical analyses and data.
Mark Leuchtenberger, CEO at Chiasma, says: “We believe this reduction in staffing and spending is the appropriate action to preserve shareholder value at this time since it is unlikely we will be able to commercially launch Mycapssa in the near term. I would like to thank the high-calibre individuals affected by this plan for their tireless efforts and contributions to the organisation. We continue to believe in the potential for Mycapssa to help many patients with acromegaly and intend to continue working diligently on their behalf.”
Sean Murray
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