Company will temporarily stop production at facility in NJ and is scaling back salaries.
Unigene Laboratories is cutting its workforce by a third and decreasing operating expenses by approximately $9–10 million for 2010. The company is developing oral and nasal formulations of peptide drugs, particularly calcitonin and PTH-based therapies for osteoporosis. Fortical®, a nasal calcitonin product for postmenopausal osteoporosis, received FDA approval and was launched in 2005.
Unigene believes that it has an adequate inventory of calcitonin and enzyme to support Fortical and will thus temporarily suspend manufacturing of those materials at its Boonton, NJ, facility. However, the firm will maintain the cGMP status of the plant. Besides the workforce reduction, plans also include salary reductions at all levels including senior management and other cost savings.
Unigene says that it will maintain all its core programs and partnered activities while scaling back operations. Upsher-Smith Laboratories holds the U.S. rights to Fortical, while Tarsa Therapeutics owns worldwide rights (except for China) to the oral calcitonin program, which is in Phase III. Additionally, the firm licensed worldwide rights for its oral PTH technology to GlaxoSmithKline and worldwide rights for its calcitonin-manufacturing technology to Novartis.
Unigene’s operating expenses rose in the first three quarters of this year compared to that of 2008 due to the initiation of Phase III studies with oral calcitonin. Operating costs were $19.42 million, an increase of $2.35 million from $17.07 million for the nine months ended September 30, 2008.
By September 30, the company had $4.17 million in cash. Unigene noted that even though expenses would go down with Tarsa taking over development of oral calcitonin, the company would need additional sources of cash by the first quarter of 2010 unless it undertook further cost reductions.
Revenue, consisting primarily of Fortical sales and royalties, is also dropping with the launch of competitive products in December 2008. For the nine months ending September 30, Unigene made $10.22 million compared to about $14.38 for same period in 2008.