Opexa Therapeutics said yesterday it will eliminate 30% of its workforce—about a dozen jobs, including that of CFO Karthik Radhakrishnan.
The company said its President and CEO Neil K. Warma was named acting CFO effective yesterday, as well as principal financial officer and principal accounting officer, positions also held by Radhakrishnan.
Opexa said the layoffs were needed to reduce operating expenses and conserve cash resources as the company gears up to complete a 190-patient mid-stage trial for its lead product candidate Tcelna®, a personalized T-cell immunotherapy.
“The restructuring initiative is intended to allow the company to focus its resources on completion of the ongoing Phase IIb Abili-T clinical trial of Tcelna in patients with secondary progressive multiple sclerosis,” Opexa said in a Form 8-K regulatory filing.
The company added that it expects to report top-line data from the Abili-T trial early in the fourth quarter of this year: “The restructuring initiative is expected to extend the company’s current cash runway into the first quarter of 2017.”
Opexa reported cash and cash equivalents of nearly $15.6 million as of September 30, 2015. The company has yet to announce fourth-quarter and full-year results for 2015—but did say last month in a corporate presentation for investors that Tcelna had a $7 billion overall market potential.
Tcelna consists of myelin-reactive T cells that are expanded ex vivo from the patient's peripheral blood and reintroduced into the patient in an attenuated form via injection. The process is designed to touch off an immune response against subsets of autoreactive T cells known to attack myelin for each individual patient.
Opexa said it plans to take a $325,000 one-time charge in the first quarter related to severance for laid-off employees. The company added that it will incur aggregate cash charges of about $330,000 associated with payments anticipated to be made under a newly adopted Retention Plan.
Under that plan, nonofficer employees who are continuing with Opexa will be entitled to receive a retention bonus equal to 2 months of base salary if they either remain in continuous employment with the company through February 28, 2017 or if they lose their jobs earlier without cause and they sign a general release and waiver of claims in favor of the company.