The company is developing oral and nasal formulations of peptide drugs but has been hit this year by rising operating expenses, primarily as a result of Phase III trials of oral calcitonin, and declining revenues.
In response the company has begun restructuring. This includes an immediate company-wide workforce reduction of one-third and the temporary suspension of production of calcitonin and an enzyme used in Fortical (calcitonin-salmon (rDNA origin)), at its facility in Boonton, New Jersey, US.
Unigene believes it has sufficient quantities of the enzyme and calcitonin to support current activities and consequently can suspend production while maintaining its core programmes.
To ensure production can resume at a later date Unigene intends to maintain the facility’s current good manufacturing practice (cGMP) compliant status and the infrastructure needed to manufacture peptides.
Further savings will be generated by initiating salary reductions at all levels, including senior management. By taking all these actions Unigene believes it can cut operating costs by $9-10m in 2010.
Unigene believes this is necessary because of the difficulties it has faced in 2009. During the first nine months of the year revenues fell by 29 per cent, primarily as a result of declining Fortical sales and royalties which have been hit by competitive products launched in December 2008.
This decline has been accompanied by 14 per cent rise operating expenses, leading to the company positing an operating loss of $9.2m over the first nine months of 2009, compared with a deficit of $2.69m in the comparable period of last year.
Unigene has licensed its Phase III oral calcitonin programme to Tarsa to free it of development costs but, with $4.17m in cash on September 30, it felt further savings were needed.