On the heels of FDA rejection, tiny Zosano cuts about a third of its workforce as latest victim of the budget axe
Numerous companies have been axing staff lately, such as Athenex Wednesday cutting staff and Flexion buyer Pacira laying off 110 employees earlier this month. And Thursday, the layoff wave continued, with a tiny Fremont, CA migraine-focused pharma finding itself the budget axe’s newest victim.
Zosano Pharma announced in its Q4 and FY2021 financial results Thursday that it would lay off roughly a third of its staff. The company didn’t say much at all about the downsizing, revealing only a “reduced workforce by approximately 31%” in a list of recent business updates.
Among the other updates include raising just over $15 million in a public offering last month, renegotiating lease terms with developer Trinity Capital and publishing data about immunogenicity using an influenza vaccine with its micro needle system.
According to Zosano’s 10-K filed with the SEC, the company was at 40 employees at the end of 2021, and is now currently at 31 employees.
Shares of the penny stock player $ZSAN went down 8% this morning when the market opened but rebounded to about $0.19 per share, or down 3% in early Friday trading. The price is a far cry from when the pharma originally went public in 2015 at $11 per share.
The news comes less than a month after the FDA refused to review the company’s resubmission for its migraine treatment patch, saying the company didn’t adequately respond to the deficiencies identified in the initial, 2020 CRL.
Endpoints News has reached out to Zosano for comment and will update accordingly.
“We are in discussions with the FDA to determine if there is a viable option to pursue approval of M207 using the currently available clinical data. In addition, we are actively evaluating financial and strategic alternatives in collaboration with external advisors, with a goal of maximizing value,” Zosano president and CEO Steven Lo said in a prepared statement.
Those alternatives may not be able to stave off concerns, however. Zosano bled cash in 2021, losing $7 million in Q4 and just shy of $30 million over the course of the entire year. And while the total came in marginally lower than the loss of $33.4 million the year before, the company said in its 10-K that it will need “substantial additional funding to fund our operations, and we will not be able to continue as a going concern if we are unable to do so.”