WATERTOWN, Mass.--()--Acusphere Inc. (OTCBB: ACUS) announced today its plan to substantially reduce costs while it continues its discussions with the U.S. Food & Drug Administration (FDA) about the regulatory path forward for its lead product candidate, Imagify™ (Perflubutane Polymer Microspheres) for Injectable Suspension. These cost reductions include a reduction in force, the termination of its lease in Watertown and the consolidation of operations at its manufacturing facility in Tewksbury, as well as the filing of a Form 15 with the U.S. Securities and Exchange Commission (“SEC”) to suspend the company’s SEC reporting obligations. These cost reductions are in addition to cost reductions previously announced in February 2009, involving the renegotiation of certain intellectual property agreements to push certain future payments into 2013.
After successfully completing a Pre-Approval Inspection (PAI) by FDA, the Company announced today a planned reduction in force of 40 people, or about two-thirds of its employees, over the next several weeks. The reductions cut across all functional areas including manufacturing, quality systems, drug development, regulatory, finance and administration. These reductions are intended to extend the Company’s cash position to accommodate continuing discussions with FDA.
The Company also announced today the signing of an agreement to terminate the lease of its current Company headquarters in Watertown, Massachusetts and relocate all Company personnel to its facility in Tewksbury, Massachusetts. Under the agreement, the Company makes a one-time payment of $800,000 and forfeits its security deposit of $997,500. The Company will also make its final monthly payment of rent for March 2009 and pays estimated operating expenses of approximately $65,000 per month from April 2009 through July 1, 2009, unless the lease is terminated earlier by the landlord.
The Company also announced today that it has voluntarily filed a Form 15 with the SEC to suspend the company's SEC reporting obligations. Upon the filing of the Form 15, the Company's obligation to file periodic and current reports with the SEC, including Forms 10-K, 10-Q and 8-K, were immediately suspended. Acusphere expects the registration of its common stock will be terminated 90 days after the filing of the Form 15 with the SEC. As a result of the Form 15 filing, the Company's securities will not be eligible for trading on any national exchange and will no longer be eligible for trading on the OTC Bulletin Board. Following the Form 15 filing, the Company's securities may be eligible for quotation on the Pink Sheets.
An independent committee of Acusphere's Board of Directors voted unanimously to file the Form 15 after careful consideration of the advantages and disadvantages of continued reporting to the SEC. Suspending the Company's SEC reporting obligations will allow it to avoid the substantial legal, accounting and other expenses associated with reporting compliance and make those savings available for continued operation of the business. The suspension of the Company’s reporting obligations will also enable management to focus more of its time and efforts on operating the business and enhancing shareholder value.
Total annualized cash savings from reductions in staff are estimated to be approximately $3.9 million. The Company estimates it will take a one-time charge in the first quarter of 2009 of approximately $0.3 million associated with these reductions. Total annualized cash savings from the termination of the headquarters lease are estimated to be approximately $3.6 million with total savings, net of the one-time payment and deposit forfeiture, of an estimated $10.6 million through 2012, the original term of the lease. The Company expects to save approximately $800,000 in 2009 as a result of filing the Form 15 to deregister our shares. These actions, in combination with the actions announced last month, are expected to extend the Company’s cash into the third quarter 2009 and provide additional time to explore strategic partnerships and financing alternatives as we continue to interact with the FDA.
Among the anticipated reductions in staff are Lawrence A. Gyenes, Acusphere’s Senior Vice President and Chief Financial Officer, who will leave the Company after completion of the year-end audit and other transition activities. There is no plan to replace Mr. Gyenes at this time.
Sherri C. Oberg, Acusphere’s President and Chief Executive Officer, said, “These decisions are extremely difficult but both appropriate and necessary given the current financing environment for life sciences companies, our continued belief that Imagify will be approved and our improved prospects for financing on more favorable terms after reaching agreement with FDA on the regulatory path forward for Imagify. We greatly appreciate the dedicated efforts of employees who have enabled us to reach this critical point for Imagify. In particular, I want to extend my thanks and gratitude to Larry Gyenes who has been an excellent partner for me and a great leader for the Company as a whole.”
Mr. Gyenes commented, “It has been a distinct pleasure to work with the many fine people at Acusphere and to play a pivotal role in helping to extend or add to the available cash to permit the Company to continue the review process with the FDA. I wish everyone the best of luck in the weeks and months ahead.”
About Acusphere, Inc.
Acusphere (OTCBB: ACUS) is a specialty pharmaceutical company that develops new drugs and improved formulations of existing drugs using its proprietary microsphere technology. We are focused on developing proprietary drugs that can offer significant benefits such as improved safety and efficacy, increased patient compliance, greater ease of use, expanded indications or reduced cost. Our lead product candidate, ImagifyTM (Perflubutane Polymer Microspheres) for Injectable Suspension, is a cardiovascular drug for the detection of coronary artery disease, the leading cause of death in the United States, for which a New Drug Application (NDA) was submitted to the U.S. Food & Drug Administration (FDA) in April 2008. Imagify and the Company's other product candidates were created using proprietary technology that enables Acusphere to control the porosity and size of nanoparticles and microspheres in a versatile manner that allows them to be customized to address the delivery needs of a variety of drugs. For more information about Acusphere visit the Company's web site at www.acusphere.com.
"Acusphere" and "Imagify" are trademarks of Acusphere, Inc.
The above press release contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, including statements regarding, the NDA submission for Imagify and likelihood of regulatory approval and the commercial opportunity for Imagify. There can be no assurance that Imagify will be approved for the indication the Company is seeking, or at all. The Company's actual results may differ materially from those anticipated in these forward-looking statements based upon a number of factors, including anticipated operating losses and existing capital obligations, uncertainties associated with research, development, testing and related regulatory approvals, including uncertainties regarding regulatory evaluation of the Company's statistical analysis plan and clinical trial results and uncertainties regarding the potential effects of not achieving clinical endpoints, limited time to date for the Company to review the details of the clinical trial results, future capital needs and uncertainty of additional financing, uncertainties regarding the cost, timing and ultimate success of the qualification of the Company's commercial manufacturing facility in accordance with applicable regulatory requirements, complex manufacturing, high quality requirements, lack of commercial manufacturing experience, dependence on third-party manufacturers, suppliers and collaborators, uncertainties associated with intellectual property, competition, loss of key personnel, uncertainties associated with market acceptance and adequacy of reimbursement, technological change and government regulation, and other risks and challenges detailed in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2007 and its Form 10-Q for the quarter ended September 30, 2008. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances that occur after the date of this press release or to reflect the occurrence of unanticipated events.