Aradigm executives jump ship after FDA snub

Aradigm's board approved a cash-preservation scheme Friday, which includes slashing exec pay by 50%. (Pexels)

Strapped for cash after an FDA rejection, Aradigm is hemorrhaging executives. CEO Igor Gonda, Chief Medical Officer Juergen Froehlich and Chief Financial Officer Nancy Pecota are all bidding the troubled biotech farewell.

The FDA served up a complete response letter on Jan. 29 for Aradigm’s Linhaliq, an inhaled form of ciprofloxacin for non-cystic fibrosis bronchiectasis patients with chronic lung infections. The letter recommended Aradigm run a two-year phase 3 trial before it can refile for approval, effectively dashing the company’s hopes of a cheap and quick fix.

In addition to data that the treatment has a “significant effect on clinically meaningful endpoints,” the agency had a laundry list of requests, from a human factors study, microbiology-related product quality information and a new in vitro drug release method development report, “among other things.”

Your Daily Newsletter — Free

Enjoying this story? Subscribe to FierceBiotech!

Biopharma is a fast-growing world where big ideas come along every day. Our subscribers rely on FierceBiotech as their must-read source for the latest news, analysis and data in the world of biotech and pharma R&D. To read on the go, sign up today to get biotech news and updates delivered right to your inbox!

The CRL came shortly after an FDA advisory committee voted 12-3 against Linhaliq. The majority of the panel did not think Aradigm provided sufficient evidence of the safety and efficacy of Linhaliq in delaying the first exacerbation in patients with chronic lung infections.

If Aradigm is to fulfill the FDA’s demands and get Linhaliq back on track, it needs to raise some serious capital, which might be a tall order with its stock price at rock bottom.

In the wake of the rejection, the company’s board settled on “temporary measures” to conserve what cash it has while it looks for more. These measures include slashing the salary of “certain officers”—including, but not limited to, Gonda, Froehlich and Pecota—by 50% and dumping its executive officer severance plan, according to an SEC filing.

Gonda, Froehlich and Pecota resigned their positions effective Sunday, while the board appointed Acting Chairman John Siebert as executive chairman and interim principal executive officer.