Acer Therapeutics said today it has eliminated about 60% of its workforce—29 jobs—and halted pre-commercialization activities for its lead candidate Edsivo™ (celiprolol) in a restructuring that comes two weeks after the FDA refused to approve Edsivo for a rare connective tissue disorder.
The FDA has sent Acer a Complete Response Letter (CRL) stating it would not approve the company’s NDA for Edsivo in vascular Ehlers-Danlos syndrome (vEDS). The CRL directed Acer to “conduct an adequate and well-controlled trial to determine whether celiprolol reduces the risk of clinical events in patients with vEDS,” the company stated on June 25.
As a result of the CRL, Acer said, its board decided to reduce operating expenses and conserve cash by cutting its workforce and ending pre-commercialization activities related to Edsivo.
“The company estimates that it will record a one-time severance-related charge of approximately $1.5 million associated with the workforce reduction in the second quarter of 2019,” Edsivo stated in a regulatory filing.
Acer says it will be able to fund its planned business operations through 2020. The company finished the first quarter with $31.8 million in cash and cash equivalents, which Acer in May said was believed to be sufficient to fund current operating and capital requirements into the first half of next year.
In a press release today, Acer added it “intends to pursue discussions with the FDA” about the Edsivo rejection as well as about continuing development of the rest of its pipeline.
Edsivo is a chemical entity being developed for vEDS in patients with a confirmed type III collagen (COL3A1) mutation. According to Acer, Edsivo is designed to promote normal collagen synthesis in blood vessels, and shift the pressure load away from the vessels most prone to dissection and rupture.
The rest of Acer’s pipeline consists of ACER-001, an immediate release formulation of sodium phenylbutyrate for patients with a Urea Cycle Disorder (UCD); and osanetant, a clinical-stage, selective, non-peptide tachykinin NK3 receptor antagonist for which Acer obtained exclusive global rights from Sanofi in December 2018 for an undisclosed price.
Pivotal bridging study planned
ACER-001 is expected in the fourth quarter to begin a pivotal bridging study expected to enroll approximately 35–70 healthy subjects, and designed to establish bioequivalence to sodium phenylbutyrate. Acer reasons it can develop successfully ACER-001 as better-tasting, and more moderately priced, alternative to existing drugs for the condition.
Based on results from the trial, and a separate independent taste assessment study, as well as FDA response following a Type C meeting, Acer said, it plans to file an NDA for ACER-001 in UCD patients in the first half of 2020.
Osanetant was initially developed by Sanofi for symptoms associated with schizophrenia. At the time it announced its acquisition of osanetant rights, Acer said it initially planned to develop the drug for “certain neuroendocrine-related disorders.” Acer has offered no further details since then, but said today that it expects to do so “in late July 2019.”
Acer expected to gain FDA approval for Edsivo by the drug’s PDUFA target decision date of June 25. “We have made significant progress in preparing for a potential launch of Edsivo, including the addition of seasoned commercial and medical affairs leaders with extensive sales, marketing, market access and product launch experience in orphan and ultra-orphan markets,” Acer stated May 14 in announcing first-quarter results.
The company’s workforce was expanded from the 23 full-time employees, plus “a number of” consultants or independent contractors, that Acer said it employed as of December 31, 2018, according to its Form 10-K annual report for 2018.
Instead, Acer received the CRL—news of which led to a sell-off by investors that sent the company’s share price cratering 79%, freefalling to $4.12 on June 25 from $19.28 the previous day.
Acer shares have dipped further since then, closing at $3.69 on July 3. The slide continued into this morning, with Acer shares trading at $3.67 as of 9:43 a.m.