Onconova cuts staff further to save cash
- Following job cuts earlier in 2016, clinical stage biopharma company Onconova Therapeutics has terminated the positions of six employees in return for severance pay totaling around $0.4 million, saving the company around $1.4 million a year.
- This followed the final tranche of funding from the terminated rigosertib deal with Baxalta.
- The company has also promoted Mark Guerin to CFO, from his previous role of Chief Accounting Officer.
Tucked inside an 8-K filing is the news Onconova is cutting its staff by roughly a fifth as of August 30, 2016. This follows the news back in February 2016, as reported in the Philadelphia Business Journal, when the company also cut six employees (including the previous CFO). CEO Ramesh Kumar cut his salary voluntarily from $543,375 to $407,531.
Onconova’s lead cancer drug is rigosertib, a small molecule drug candidate in Phase 3 for intravenous use in myelodysplastic syndromes (MDS). Patient recruitment is ongoing at 103 sites, including in Japan with Onconova’s Japanese partner SymBio Pharmaceuticals. An oral form, also in development in MDS, is in a Phase 2 study.
The company, however, has been facing some challenging times. Onconova signed a deal with Baxalta in September 2012 to develop the intravenous form of rigosertib. The development of the drug hit a hiccup in February 2014 with the announcement of failure to meet the primary endpoint of statistically significant improvement in median overall survival in general MDS patients in the Phase 3 ONTIME trial. This led to a drop in stock value of over 40%, as reported in the Philadelphia Business Journal. The company then shifted gears, targeting more the high-risk patients of the current trial.
In March 2016, and following its acquisition by Shire, Baxalta terminated the deal, stating that its ongoing support for the INSPIRE trial did "not align with Baxalta's strategic priorities." The financial support from Baxalta finished at the end of August 2016, coinciding with the date of the staff cuts.
Short on cash and scrambling to fund its clinical programs alone, the company closed a $17.4 million financing in June 2016.
- Securities and Exchange Commission Filing
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