Cash-strapped Gemphire lets go of five staffers as it contends with a clinical hold
Scrapping for cash to produce additional safety data requested by the FDA before it could proceed with its lead drug, Gemphire has cut into its C-suite for a round of layoffs.
The reduction — which claims five staffers, or a third of the tiny biotech’s workforce — caps a turbulent few months at Gemphire $GEMP during which its shares were battered, first by a partial clinical hold that’s derailed its plan for late-stage studies, then by the news that it has shuttered a Phase IIa study after investigators decided the drug might have made patients worse.
Among the five laid off are chief financial officer Jeffrey Mathiesen and chief medical officer Lee Golden. CEO Steven Gullans, who will now double as the principal financial and accounting officer of the company, has this to say in a statement:
The workforce reduction is a necessary action to conserve capital. We remain confident in the potential value of gemcabene as a breakthrough therapy for dyslipidemia and are committed to working with the FDA to complete the necessary steps to lift the partial clinical hold. We appreciate the contributions and efforts of the employees affected by this decision and thank them for their dedicated service.
Investors may be less confident. Shares were down 14% in pre-market trading.
Gemphire got its sole anchor program, gemcabene, from Pfizer, with plans in both cardio and liver diseases. While the drug has shown some efficacy in reducing triglycerides — briefly reviving hope — there’s a lot left to prove at a company that’s experienced repeated setbacks since going public two years ago.