Delcath axes one-third of staff after FDA rejection

Delcath's ($DCTH) year of disappointment lumbers on as the New York company has canned 21 of its 60 employees, looking to cut costs as it figures out just what to do with an FDA-rejected device.

Last month, the agency finally closed the door on Melblez, a drug-device combo designed to treat eye cancer that has spread to the liver, which came as little shock to anyone paying attention. The FDA demanded another randomized clinical trial for the device, likely postponing an approval date by years, and Delcath summarily fired CEO Eamonn Hobbs, appointing two of its executive vice presidents to serve as co-CEOs as it decides how to proceed with the FDA.

The latest layoffs will trim about $10 million from annual operating costs, the company said in a statement, and will help Delcath's "ability to initiate the strategic objectives currently under evaluation," which could include an all-out sale.

Delcath's rapid decline began in the spring, when an FDA advisory panel took serious issue with its pivotal data, pointing out that about 7% of Melblez patients died of adverse events like liver failure and gastrointestinal bleeding and recommending the agency reject the drug-device combo.

That news sent Delcath's stock into a 40% tailspin, and the company moved to ax 20% of its workforce in June. The ensuing FDA rejection and CEO ouster came as little surprise and had little effect on the company's shares.

This week's job cuts, however, have nearly doubled the value of Delcath's stock. The company traded at about 59 cents Monday morning.

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