Biodel said today it has eliminated 15 more non-executive employees this month in a restructuring—the company’s second round of layoffs in three months—while its CEO has stepped down.
The latest layoffs follow the elimination of 10 staffers in October, and are aimed at preserving cash while it assesses its options to maximize shareholder value.
“The positions impacted are across Biodel's research, quality control, and clinical departments,” Biodel said in a Form 8-K regulatory filing on January 27. “Employees directly affected by the reduction in force have received notification and will be provided with severance payments and continuation of benefits for a limited term.”
Biodel estimated the latest job cuts will cost it approximately $1.3 million in one-time cash severance payments—but will generate savings by chopping its rate of cash spending from approximately $4.5 million per quarter to approximately $1.1 million per quarter.
Biodel said it had cash of approximately $37 million as of December 31, 2015—down from the $40.8 million reported as of September 30, 2015.
The company added that it is continuing to assess strategic alternatives, as it said it would do on December 17. Biodel’s board of directors has established a special committee to evaluate alternatives, retaining Ladenburg Thalmann & Co. as an advisor to the company.
Biodel in December also suspended enrollment in BIOD-531 Study 3-157, a Phase IIA clinical trial initiated the previous month. The Phase IIA study was designed to evaluate patient-friendly regimens based on BIOD-531— Biodel's biphasic insulin formulation characterized by an ultra-rapid-acting onset and basal duration of action—and compare them against an advanced “basal-bolus” regimen in patients with type 2 diabetes.
The study was also intended to evaluate the efficacy of co-treatment with BIOD-531 and Novo Nordisk’s GLP-1 analog Victoza® (liraglutide).
A Phase IIB trial of BIOD-531, Study 3-250, was placed on partial clinical hold by the FDA last year. The agency requested additional testing on the U-400 syringe used to deliver BIOD-531, but lifted its hold in October. That study was designed to compare BIOD-531 to Eli Lilly’s Humalog Mix75/25 in patients with type 2 diabetes who are taking insulin.
In its statement today, Biodel also disclosed that its CEO Errol de Souza, Ph.D., has stepped down effective January 26. He has been succeeded by CFO Gary G. Gemignani, who now holds the position of interim CEO with primary responsibility of managing the review of strategic alternatives.
