RedHill slashes US commercial team by a third, makes move on approved GI drug to boost coffers

RedHill Biopharma will lay off a third of its U.S. commercial team as the Israeli biotech looks to claw back $50 million in savings while eyeing up a deal for an approved gastrointestinal drug.

Most of a planned $50 million in savings over 18 months would come from the staff cutbacks, which will return the company’s workforce to pre-pandemic levels. RedHill will also streamline operational expenditure and refine “the company's R&D strategy to rely mostly on external funding sources based on the promising clinical data generated to date,” it said in a June 23 statement.

“On behalf of RedHill and its board of directors, I would like to express my profound and respectful gratitude to the colleagues who are departing RedHill,” CEO Dror Ben-Asher said. “While difficult, the changes we have made as part of our cost reduction plan were necessary given the current realities.”

The company has three approved products in the form of Talicia for H. pylori infection, Movantik for opioid-induced constipation and Aemcolo for E. coli-induced diarrhea. RedHill is hoping to add to this by licensing an approved therapy that could help position the company for further growth, Ben-Asher said.

“RedHill is in non-binding discussions to acquire a synergetic U.S. FDA-approved, patented GI drug currently generating dozens of millions of dollars, which, if materialized, will help expedite and increase cash generation,” he said.

The biotech also has a number of assets in late-stage clinical development, including RHB-104 for Crohn’s disease and RHB-102 for gastroenteritis. RedHill saw its second attempt at pushing a COVID-19 pill through phase 2 achieve some success at staving off hospitalization in March after a previous asset for the indication flopped.

The company saw its net revenues for the first quarter of 2022 drop to $18.2 million from $22.1 million in the previous quarter, which the company attributed to “cyclical trends in Movantik sales and increased gross to net deductions related mainly to increased formulary coverage.”

To read more about layoffs across the biotech industry, check out Fierce Biotech's Layoff Tracker.