After its cancer treatment took a beating from FDA advisers last month, Delcath Systems ($DCTH) has once again revealed layoffs. The Queensbury, NY-based company plans to fire 20% of its U.S. workforce to conserve cash and concentrate resources in Europe, where the company has CE mark clearance for its drug-device combo.
Delcath has been trading at close to cash since an FDA panel voted 16-0 against that same drug-device system for delivering high-dose chemotherapy in liver cancer patients. Its shares traded at $0.40 prior to the opening of the market, down 2.44% premarket and valuing the company at $38.69 million. Its cash balance at the end of the first quarter was $42.8 million.
With very slim chances of the FDA approving its application for the Melblez system, Delcath has decided to leave its European operations unscathed in the latest round of layoffs. The company aims to invest in beefing up product sales, which came in at $100,000 during the first quarter of 2013, and invest in clinical development. Harold Mapes, Delcath's head of global operations, is heading for the exits early next month, and the company has hired William Appling to assume Mapes's duties as executive vice president of research and development and global operations.
It's unclear how many U.S. workers are getting pink slips in the latest round of layoffs. The company announced a 21% cut to its workforce in April and modest layoffs in January without ever saying how many jobs would be slashed.
"The actions we announced today are designed to further increase our organizational efficiencies with a goal of reducing our expected cash burn in the fourth quarter to approximately 50% of what it was in the second quarter of 2012," CEO Eamonn Hobbs said in a statement. "Our team continues to be focused on our key strategic priorities in clinical development and European commercialization."
The FDA is scheduled to decide the fate of the company's application for approval of Melblez by September 13. Agency advisers shot down the company's application after reviewers cited problems with the company's system for blocking off cancerous livers to keep high doses of chemo out of the bloodstream and surrounding tissues. As FierceMedicalDevices reported, about 7% of patients who got the company's treatment died after complications such as internal bleeding and liver failure.
Investors mounted a class action lawsuit this month after the FDA panel's unanimous rejection of the system.
- here's the release
- check out the report from FierceMedicalDevices