Ophthotech restated today that it will slash its workforce by approximately 80% during the first half of this year, and for the first time estimated the financial effect of the cuts, a month after disclosing the failure of its Fovista® (pegpleranib) in two Phase III trials assessing the macular degeneration candidate in a combination therapy.
“The Company expects to realize estimated annualized cost savings from the reduction in personnel in the range of $25 million to $30 million starting in the third quarter of 2017,” Ophthotech said in a regulatory filing.
In the filing, Ophthotech also said it will incur approximately $14.4 million of pretax charges during the first and second quarters of 2017 related to the job cuts, of which approximately $13.8 million is expected to result in future cash expenditures.
“These pretax charges relate to (a) expected severance and other employee costs of approximately $12.3 million and (b) expected lease termination costs of approximately $2.1 million,” Ophthotech disclosed.
The filing did offer an update on the current size of Ophthotech’s workforce, and a company spokesperson did not immediately respond to a GEN query seeking that number. Ophthotech said last month in a regulatory filing that it would axe 125 to 135 workers, leaving it with between 20 to 30 staffers. The company employed 116 full-time employees as of January 31, 2016, Ophthotech stated in its Form 10-K Annual Report for 2015, filed in February.
The job cuts follow the failure of Fovista in the OPH1002 and OPH1003 trials, designed to evaluate the safety and efficacy of 1.5 mg of Fovista in combination with the Roche (Genentech)/Novartis marketed drug Lucentis® compared to Lucentis alone. The two Phase III trials enrolled a combined 1248 patients with wet age-related macular degeneration (AMD).
The combination therapy did not generate a statistically significant improvement over Lucentis monotherapy. In the 619-patient OPH1002 trial, subjects receiving Fovista combination therapy gained an average of 10.74 letters of vision on the Early Treatment Diabetic Retinopathy Study (ETDRS) standardized chart at 12 months, compared to a mean gain of 9.82 ETDRS letters in patients receiving Lucentis.
In the 626-patient OPH1003 trial, subjects receiving Fovista combination therapy gained a mean of 9.91 letters on ETDRS at 12 months, compared to an average gain of 10.36 for Lucentis monotherapy.
Following the trial failures, shares of Ophthotech cratered 86%, from a close of $38.77 on December 9 to $5.29 the following trading day of December 12. Shares today traded at $4.74 as of 10:36 a.m., down about 2.5% from the Friday close of $4.86.
