Achaogen Restructures & Slashes Staff 28% Ahead of Antibiotic Launch – Info Entrepreneurship
The runup to a new drug launch is usually a time for hiring, but antibiotics developer Achaogen is doing just the opposite.
Faced with a tough market for antibacterial products, Achaogen (NASDAQ: AKAO) announced Thursday that it will eliminate 80 positions, which is roughly 28 percent of its staff. Those cuts include much of the executive team. In a statement released after the market close, the South San Francisco, CA-based biotech said the restructuring would enable the company to focus its attention on the launch of its antibiotic plazomicin (Zemdri), as well as two research programs that already have funding.
Shares of Achaogen perked up 1.5 percent in after-hours trading.
Achaogen develops antibiotics to treat drug-resistant infections. Last month, the FDA approved plazomicin as a treatment for complicated urinary tract infections. But it was a split decision for the drug. The regulator rejected plazomicin as a treatment for bloodstream infections, telling the company in a letter that its clinical trial did not provide enough evidence of the drug’s efficacy. And the approval for treating urinary tract infections wasn’t a clean win. The injectable drug’s label carries a boxed warning that alerts physicians and patients that the drug may cause kidney problems or affect muscle use. Hearing problems and vertigo have also been reported in some patients who have used the drug. The drug is approved only for use in patients who have limited or no treatment alternatives.
CEO Blake Wise said in a prepared statement that the market for novel antibiotics requires the company to cut costs and narrow its focus. The divisions working on the commercialization of plazomicin aren’t affected by the restructuring. But the company is cutting spending on early-stage R&D, technical operations, and administration.
Those losing their jobs include Kenneth Hillan, president of R&D; Chief Financial Officer Tobin Schilke; and Chief Scientific Officer Lee Swem. Chief of Staff Zeryn Sarpangal will take over as CFO after Schilke leaves at the end of September. Liz Bhatt, currently chief business officer, was appointed chief operating officer, effective Thursday. Achaogen plans to discuss the restructuring during the company’s second quarter earnings conference call, scheduled for Aug. 6.
Here’s more about the early days of Achaogen and its vision for developing new broad-spectrum antibiotics.
Image by Flickr user Joe The Goat Farmer via a Creative Commons license
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