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12:00 AM
Aug 24, 2009
 |  BioCentury  |  Finance

Ebb & Flow

Having granted U.S. marketing rights to Intermezzo zolpidem to Purdue Pharma L.P. earlier this month, Transcept Pharmaceuticals Inc. (NASDAQ:TSPT) last week said it would cut the staff made superfluous by the deal.

It will trim employees by 12 (32%) to 25, mainly from the staff that was responsible for clinical development, sales and marketing and manufacturing of Intermezzo, according to President and CEO Glenn Oclassen. The move will cut Transcept's annualized expenses by about $1.5 million. The company will take a restructuring charge of about $525,000 this quarter.

An NDA for Intermezzo to treat middle of the night insomnia has an Oct. 30 PDUFA date. Transcept will now focus on approval of the NDA, worldwide commercialization of Intermezzo and evaluating potential additions to its pipeline.

Oclassen said Transcept is in talks for commercialization outside the U.S., with a current focus on Europe.

Under the Purdue deal, Transcept has an option to co-promote Intermezzo to psychiatrists in the U.S., who Oclassen said account for about 15% of sleep prescriptions. He said the option could be exercised starting next year and that Transcept would have 55 months to do so.

He estimated Transcept would need 50-100 sales reps to market Intermezzo to this group.

As to the pipeline, Transcept already has ondansetron, which it is evaluating in combination with SSRIs to treat obsessive compulsive disorder (OCD). Oclassen said the company is evaluating potential in-licensing candidates that also could be marketed to psychiatrists.

At June 30, Transcept had $73.4 million in cash, not including the $25 million upfront payment received this month from Purdue. Transcept had a 1H09 operating loss of $15.9 million.

The company is eligible for $30 million upon FDA approval and $90 million in additional milestones, plus royalties up to the mid-20% range. If Transcept exercises its option to co-promote, the company will be eligible for an additional double-digit royalty on net U.S. sales to psychiatrists.

On the week, Transcept shares added $0.14 to $9.25.

Stemming Geron

This past January, when Geron Corp. (NASDQ:GERN) announced it was planning to start a Phase I trial of the world's first human human embryonic stem cell-based therapy, the news pushed its shares to a high of $8.05 on Feb. 6. The stock then posted a 52-week high of $9.24 on July 17, putting the company into the mid-cap range at $841 million.

Last week, FDA put...

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