Spectrum hits the reset button, slicing away 30% of its workforce in pivot around 2 lead assets
Covid-19 has been a rough go for many drugmakers, but few more so than Spectrum Pharmaceuticals, which has seen inspection delays and unwanted CRLs haunt its chance at a first approval. Feeling the sting, Spectrum will now downsize to keep the lights on through the year.
Spectrum will cut 30% of its workforce and pivot its R&D efforts around its two furthest-along drugs as part of a restructuring effort that will pave the company’s cash runway out into next year, it announced Wednesday.
In August 2021, the FDA handed Spectrum a CRL for a neutropenia drug set to be marketed as Rolontis, citing manufacturing issues in the drug’s application. The FDA ordered a re-inspection at the drug’s manufacturing site in South Korea — this after Covid-19 related travel restrictions for FDA inspectors pushed off Rolontis’ early review date by the agency.
Spectrum said it would prioritize its R&D efforts around getting Rolontis across the finish line as well as driving ahead on poziotinib, a TKI inhibitor candidate for HER2 exon 20-mutant non-small cell lung cancer.
Spectrum CEO Tom Riga had this to say in a statement:
The decision to restructure the organization is necessary to focus on our advanced clinical programs that will drive our future growth. I would like to express my appreciation to our colleagues who are affected by this decision and are leaving Spectrum. We are grateful for their dedication and their contributions to advancing our mission. The changes we are implementing are expected to result in a reduction in operating expenses and the extension of the company’s cash runway into 2023.
As Rolontis and poziotinib get the upvote, Spectrum said it will “deprioritize” development of its early-stage pipeline, which includes its FIT Program (IGN 002) and IL-12. Meanwhile, the company plans to “significantly reduce” its footprint at selected facilities this year amid the cost-cutting efforts.
In all, the cuts will reduce Spectrum’s burn rate by about 20-25%, which the company expects will save enough cash to get it into 2023.
Shares in $SPPI, already well in penny stock territory, were trading down around 4% on the news Wednesday.