Telesta Therapeutics said today it is continuing to cut its remaining workforce and will sell off its manufacturing sites, terminate its European rights agreement with Ipsen for the bladder cancer treatment MCNA, as well as continue to assess strategic options and cut costs.
The company disclosed plans to shrink its workforce to 15 full-time employees—down from 32 as of June 30, and 50 as of March 31. Another four employees will be maintained at Telesta’s two manufacturing facilities “during the time required to monetize these facilities,” the company said in a statement.
Telesta is seeking to sell the Belleville Ontario-based Vaccine Manufacturing Centre (VMC) and the Montreal MCNA manufacturing site. The company said it has seen renewed interest from potential buyers in the Belleville facility and will continue working with its broker, Pharmabiosource, to complete a sale of the VMC, where Telesta recently renewed a lease with an undisclosed tenant for an unspecified portion of the space through April 2018.
Since continued operation of the VMC remains cash neutral for Telesta, the company added, “it is rational to work to find the right buyer, even though the sales process had taken longer than originally envisaged.”
Telesta is also interviewing brokers for the smaller Montreal MCNA facility, and will take “the time necessary” to ensure that an optimal sales price is achieved, the company said.
Telesta had hoped to begin marketing MCNA (Mycobacterium phlei cell wall–nucleic acid complex) this year. Instead in February, the company received a Complete Response Letter from the FDA in which the agency stated it would not approve the company’s Biologics License Application (BLA) for MCNA unless the company completed another Phase III trial to establish the candidate’s safety and efficacy.
Telesta submitted its BLA to the FDA on June 29, 2015. The Complete Response letter ended earlier plans by the FDA to decide on the BLA by MCNA’s Prescription Drug User Fee Act (PDUFA) review goal date of February 27.
In response, Telesta sought and was granted a “Type A” meeting with agency officials in April to discuss MCNA development.
“Telesta has determined that there is no reasonable assurance that a development partner in any region of the world can be found for MCNA in the short term,” the company stated.
As a result, Telesta said, it will close the Montreal site and seek a buyer. The company has also terminated an agreement giving Ipsen rights to MCNA in Europe and other areas, with those rights returning to Telesta.
Under the Ipsen deal, inked in October, Ipsen won rights to develop and commercialize MCNA for high-risk nonmuscle invasive bladder cancer worldwide except the U.S., Canada, South Africa, Mexico, South Korea, and Japan. Ipsen agreed to pay Telesta $10 million upfront and up to $127 million in milestone payments, plus tiered royalties on net sales of MCNA in territories covered by the agreement.
In March, Telesta announced a 15% workforce reduction, saying it needed to cut costs as it reviewed its strategic options. That review is still ongoing, the company said, although the board has ruled out a cash selloff of the company or a liquidation of all assets.
“Telesta’s Board of Directors has determined that selling Telesta for its net cash and public listing or liquidating the company for the distributable cash, does not provide Telesta's shareholders with a return that is meaningfully different from current price levels, after accounting for related fees, severances and uncertainty concerning the value to be received from nonmonetized assets,” the company stated.
Instead, Telesta said, it will pursue acquisition or merger opportunities, sell off noncore assets, continue cutting costs, and seek to in-license or acquire clinical or preclinical drug candidates.