Columbia Laboratories (NASDAQ:CBRX) is cutting 42 percent of its staff and reviewing strategic options following a complete response letter that delays the approval of a vaginal gel for high-risk pregnancies it has developed with Watson Pharmaceuticals (NYSE:WPI).
The Livingston, New Jersey drug developer is reducing its workforce from 24 to 14 and the cuts will focus on research and development, and administrative staff, according to a company statement. Although it will record a $500,000 charge for the cuts, it will save $1.5 million.
The remaining staff will focus their efforts on public reporting obligations, management of its supply chain and the company’s role on the joint development committee with Watson Pharmaceuticals for the Progesterone Vaginal Gel 8% to reduce the risk of preterm birth in women with a short cervix.
Inside an Automated Healthcare Practice: Redesigning Care Around People, Not Paperwork
By reducing administrative burden and redesigning workflows around human needs, it creates space for what matters most: connection between clinicians and patients.
Columbia Labs President and CEO Frank Condella acknowledged the job cuts were a difficult decision. “However, it is a step we must take to streamline operations and secure the company’s positive financial position.”
Although Columbia transferred its new drug application (NDA) for Progesterone Vaginal Gel 8% to Watson last month, it would be entitled to royalties provided the drug meets certain milestones. Columbia has developed and sold six products for the U.S. market, including Crinone, for which it gets royalties on annual net sales from Watson.
The long process of getting a drug to market is the source of a lot of frustration in the pharmaceutical sector and can force companies to make substantial staff cutbacks to survive. Big Pharma began a trend of cutting its R&D staff and outsourcing the work to clinical research organizations that have grown in number to such an extent that the CROs are consolidating.
Columbia Labs will be expected to shed more light on the move and its future in a conference call discussing its quarterly earnings on March 8.