Egalet axes 40% of staff to focus on opioid education
- Pennsylvania-based biotech Egalet Corp. revealed along with second quarter earnings on Wednesday that it will cut its workforce (excluding its sales team) by 40%.
- With the reduction of expenses from staff cuts and the “elimination of certain other expenditures,” the company anticipates 2018 costs to be $55 million to $60 million, down 35% from 2017.
- As of June 30, Egalet had $87.9 million in cash and equivalents, and expects to have a cash runway through 2020.
Egalet brought in $6.3 million in product sales during the second quarter, but also spent significantly more, including $12.5 million on general and administrative expenses, $9.3 million on sales and marketing expenses and $4.6 million in R&D expenses.
The increases in expenses were largely driven by costs associated with the Food and Drug Administration's approval of Arymo ER (morphine sulfate extended-release). The company got the go-ahead for the abuse-deterrent morphine and has been launching it throughout the quarter.
Egalet said on its second quarter call Wednesday that Arymo ER is now covered by one of the large payers and is available on formulary for 24 million people in the U.S., giving it access to 57% of the commercially insured population.
"For the remainder of the year, our goal is to continue to educate our target healthcare providers, work towards gaining additional payer coverage among commercial lives, and take the necessary steps to secure future coverage with Medicare and Medicaid insured patients," said CEO Bob Radie. "We do not expect to see government insured patient access until 2018 and beyond."
Addressing the opioid crisis and the tailwinds associated with prescribing opioids in that environment, Radie noted that there needs to be increased education around abuse-deterrent technology and that the company will focus its efforts on this education for stakeholders.
"To maximize the commercial opportunities for all three of our products, we are focusing our resources on support of these products," he said. "We have restructured our organization to align with our key objective. With the reprioritization of internal projects, we are reducing our expenses that do not directly support the growth of our commercial business."
- Seeking Alpha Egalet Earnings Transcript
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