Theratechnologies to Discontinue COPD Clinical Program
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"We are on track to reach our year-end target of 3,000 to 3,500 new prescriptions in the U.S. for EGRIFTA®, as announced earlier in the year. However, given the recent increase in uncertainty in financial markets, we have decided to accelerate our path to profitability," stated John-Michel T. Huss, President and Chief Executive Officer of Theratechnologies.
Huss continued, "With patient enrolment still in its early stages, now is the time to discontinue our COPD program," added Mr. Huss.
As a result of today's announcement, there will be a 60% workforce reduction or approximately 40 positions.
"I wish, of course, to sincerely thank all affected employees for their valuable contributions. This decision was not taken lightly and is in no way a reflection of the quality of their work," concluded Mr. Huss.
The Company will now focus its efforts on tesamorelin's significant potential for the treatment of excess abdominal fat in HIV patients with lipodystrophy.
Currently, applications for this indication are under review with regulatory agencies in Europe, Argentina, Brazil, Canada, Israel and Mexico.
The Company will also accelerate the development of a second generation growth hormone releasing factor (GRF) for a broad range of potential medical indications and using new, more patient-friendly methods of administration.
The clinical program evaluating tesamorelin in muscle wasting associated with chronic obstructive pulmonary disease (COPD) was initiated in February 2011.
The Phase II clinical trial was launched in September 2011 and was still in the early stages of enrolling patients. Lead investigators have been notified that the program has been discontinued.
The Company estimates that today's announcement will translate into cost savings of approximately $10 million in 2012. The Company estimates that the program would have required a total investment of approximately $90 million over the next four years.
Following this decision, Theratechnologies currently estimates that it will incur charges of approximately $3 million related to severance costs and the termination of the clinical trial. Theratechnologies expects to register these charges in fiscal 2012.
The Board has unanimously approved these decisions at a regular Board Meeting held yesterday.
Changes to the Board
To demonstrate its commitment to these decisions, the Board aims to lower its costs by approximately 50%. This will be achieved by reducing the number of committees, lowering remuneration fees and the number of members.
In addition, Mr. Jean de Grandpre, who had previously expressed his intention to retire by the end of the year, confirmed his decision. His retirement is effective immediately.
"I would like to take this opportunity to thank Mr. Jean de Grandpre for his substantial and invaluable contributions to the Company as a member of the Board for the past 18 years, and formerly as Chairman for over ten years. We wish him all the best in his well-deserved retirement," concluded Mr. Pommier, Chairman of the Board of Theratechnologies.
