NeurogesX slashes staff, shifts R&D direction after FDA slaps down app

As expected, the FDA has rejected NeurogesX's application to expand the use of Qutenza, which clearly came as no surprise to management. After getting raked over the coals by regulators and then unanimously voted down by an expert panel, which failed to see anything like the efficacy data it needed for an endorsement, NeurogesX ($NGSX) management was ready with a restructuring plan this morning. The San Mateo, CA-based biotech says it is axing more than half its staff, switching focus to another program and scrounging for cash.

A total of 43 staffers are getting pink slipped, leaving 32 workers to set up a late-stage study of NGX-1998. Sales and marketing personnel appear to be taking the brunt of the cuts as NeurogesX looks for alternative marketing strategies. And management added that it plans to hunt for a partnership or raise capital to fund a planned Phase III for NGX-1998.

The biotech company says the Complete Response Letter from the FDA includes a demand for at least one "adequate" study of Qutenza to back its pitch to approve it for HIV-related pain. And while the company vowed to sit down with regulators to better understand their position, the developer says it will not invest any more cash on researching Qutenza.

"Our priority is to preserve our resources to enable us to move NGX-1998 rapidly into Phase III development," says CEO Ronald Martell. "Accordingly, we intend to reduce our marketing and sales activities significantly. Our corporate focus remains firmly fixed on the value that we believe NGX-1998 can bring to our shareholders. We regret that this decision will affect those individuals who have worked diligently to commercialize Qutenza and we thank them for their service to the company. NeurogesX remains committed to ensuring the availability of Qutenza for PHN patients in the United States, and we are seeking alternatives strategies, including potential partnerships, to increase awareness of Qutenza as an effective therapy for PHN patients."

- here's the press release