Neuralstem to ax staff ‘across all divisions’ to save precious cash

After recent trial setbacks, Germantown, MD-based stem cell biotech Neuralstem ($CUR) has announced a further “corporate reorganization” program that will see a number of undisclosed cuts to staff.

Problems began a year ago when it posted positive top-line results for its experimental ALS therapy NSI-566--but its shares tanked when some murky efficacy data led investors to question the future of the stem cell treatment. NSI-566 is an injection of human spinal cord stem cells designed to fight the muscle-wasting effects of amyotrophic lateral sclerosis, or ALS.

Back in January, the biotech announced a vague statement saying it was set for a “refocused clinical and corporate strategy.” Today, that looks to have gone one step further into cuts, as it has announced a “corporate reorganization” that includes a “workforce reduction across all divisions,” although specific numbers have not been released.

This, the company said in a statement, will help it significantly lower its operating expenses while “retaining the expertise needed to implement the company's refocused strategy.”

The focus now for Neuralstem is advancing its NSI-189 neurogenic small molecule program, which is currently in a Phase II trial for the treatment of major depressive disorder.

In an effort to bring more money in, the biotech said it will also continue to look for collabs for the troubled NSI-566 program. In addition to ALS, NSI-566 is also in a Phase I study to treat paralysis due to chronic spinal cord injury, as well as in another early-stage trial to treat paralysis from ischemic stroke.

“This reorganization is necessary to efficiently allocate our resources on the company's refocused strategy thereby creating value for all stakeholders,” said Rich Daly, Neuralstem’s CEO, who took over from its co-founder and long-serving former president and CEO Richard Garr back in February. Garr remains on the board of the company.

“Taking these steps will enable us to continue to execute on our clinical development plan for NSI-189 while retaining our core proprietary stem cell technology. Additionally, I would like to express my gratitude to those members of our team affected by the action. Our entire team has worked with passion to develop therapeutic alternatives for people suffering with challenging CNS afflictions. We are proud of the work they have done to bring hope and answers to patients, their families and caregivers.”

The penny-stock biotech was down 1.8% by 10am EDT this morning.

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