Acusphere Inc. announced that it has reduced its employee base by 24 people, or about 24 per cent, primarily in functions related to manufacturing of its lead product candidate, Imagify (Perflubutane Polymer Microspheres) for Injectable Suspension.
In addition, all senior managers at the vice president level and above are taking salary reductions of 10 per cent or more effective August 1, 2008, to further decrease operating costs, while Acusphere awaits US Food & Drug Administration (FDA) review and potential approval of its New Drug Application (NDA) for Imagify. The company has also given notification of termination to certain consultants and contractors. With the announced reductions, total employment at Acusphere is now 77 personnel, a company press release stated.
In late June, FDA accepted Acusphere's NDA submission for Imagify, indicating that the application was sufficiently complete to permit a substantive review. With a standard review under the Prescription Drug User Fee Act (PDUFA), the target action date is 10 months from the submission date, or February 28, 2009. At the PDUFA date, FDA will either approve Imagify or provide a complete response letter on its review of the Imagify NDA. The announced reductions in combination with previously announced cash savings from patent payment deferrals, manufacturing cost reimbursements and the renegotiation of other contracts currently underway, are intended to support the company's goal of stretching its existing financial resources and reduce its financing needs prior to the PDUFA date. The company believes that potential partnering and financing terms could be more favourable following the PDUFA date.
Total annualized cash savings from reductions in staff and senior management salaries are estimated to be approximately $2.1 million. The Company estimates it will take a one-time charge in the third quarter of 2008 of approximately $0.3 million associated with the staff reductions. In addition, notice of termination to certain consultants and contractors will result in estimated annual savings of approximately $2.0 million. When combined with the patent payment deferrals and manufacturing cost reimbursements, the actions announced today bring total cash savings prior to the PDUFA date to approximately $6.4 million.
Sherri C. Oberg, Acusphere's president and chief executive officer, said, "These decisions are extremely difficult but both appropriate and necessary given the current financing environment for life sciences companies, our continued belief that Imagify will be approved, our improved prospects for financing on more favourable terms after the PDUFA date and our progress in manufacturing. We greatly appreciate the dedicated efforts of employees who have enabled us to reach this critical point for Imagify."
Acusphere is a pharmaceutical company that develops new drugs and improved formulations of existing drugs using its proprietary microsphere technology.