Zosano Pharma has been unable to adequately answer the pending questions that led to the FDA rejecting the regulatory submission for its migraine treatment, so now, cash-strapped, the drug-delivery biotech is turning to cost-saving measures that have slashed its workforce by nearly a third one.
Zosano, headquartered in Fremont, California Report Fourth-quarter and full-year 2021 financial results are due after the market close on Thursday.
Zosano’s lead product candidate, M207, is a proprietary formulation of the migraine drug zolmitriptan, delivered via microneedles on a skin patch. Zolmitriptan is an ancient generic drug that comes in oral and nasal spray forms. With its skin patch system, Zosano is designed to provide rapid absorption, allowing the drug to work faster and last longer.
In 2020, the FDA rejected the Fremont, California-based biotech’s application for M207 approval, citing inconsistent drug exposure levels in clinical studies. FDA also requested additional product quality verification data. Zosano resubmitted the application in January of this year. A month later, the FDA sent a letter informing the company that its response was inadequate.according to annual reportthe regulator added that it cannot begin reviewing the M207 application until Zosano’s responses to pending questions are complete.
“There can be no assurance that we will be able to adequately address the issues raised to the FDA’s satisfaction,” Zosano said in the annual report. “If we are not able to successfully develop, obtain approval and commercialize our product candidates, our business will be adversely affected.”
Zosano has been adversely affected. A spending-cutting program that began in March has cut about 31 percent of its workforce. As of Thursday’s annual report filing, the company said it had hired 31 people, 21 of them in preclinical research and development. The report also noted that the company has engaged a Sierra Constellation partner to explore options that could include the sale of assets or a joint venture or partnership. Zosano reported a cash position of around $11 million at the end of 2021.company $15.4 million raised In February’s securities offering, the cash issue persisted. Zosano said in its annual report that the company did not have enough funds to last a year.
“We are in discussions with the FDA to determine if there is a viable option to pursue approval of M207 using currently available clinical data,” Zosano President and CEO Steven Lo said in a prepared statement. “In addition, we are actively evaluating financial and strategic options to maximize value, in partnership with external advisors. We believe our proprietary transdermal microneedle patch technology offers potential therapeutic and practical benefits to patients.”
Zosano wasn’t the only biotech company to disclose austerity measures this week. Here are some others:
—Athenex announces plans for a “substantial cost reduction program” aimed at cut the expenses more than 50%.Cost-cutting plan comes a little over a year later FDA rejects company’s oral chemotherapy regimen, asks company to conduct another Phase 3 study. Athenex, based in Buffalo, New York, reported $35.2 million in cash and cash equivalents at the end of 2021.
–Gene therapy developer Passage Bio announces plans 13% layoffs To reduce expenses and extend its cash runway to the second quarter of 2024. The Philadelphia-based company said it will focus on programs developed in partnership with Penn’s gene therapy program and its three main clinical programs. – Staging plan for rare neurological diseases. Passage Bio reported a cash position of $128.9 million at the end of last year.
— Epilepsy and epilepsy drug developer Ovid Therapeutics is trim Its workforce is about 20%. The New York-based biotech company said it expects the layoffs to extend the company’s cash beyond 2024. Ovid’s former lead program, a prospective treatment for Angelman syndrome, failed a pivotal study in 2020.But the biotech received $196 million last year Sale of rights to collaborative epilepsy program to Takeda Pharmaceuticals. Ovid put some of his cash to work in January, Receives rights to develop preclinical small molecule drug for refractory epilepsy from AstraZeneca. The company reported $187.8 million in cash at the end of 2021.
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