Flex Pharma Down On Workforce Reduction, Ends Phase II Study
Zacks Investment Research | Jun 14, 2018 05:55AM ET
Flex Pharma Inc. (NASDAQ:FLKS) announced that the company is ending the phase II studies for its pipeline candidate FLX-787 in two indications. The company discontinued the ongoing phase II studies of FLX-787 in amyotrophic lateral sclerosis (ALS) and Charcot-Marie-Tooth (CMT) due to oral tolerability concerns observed in both studies.
The concerns were observed in a subset of patients being treated, with the oral disintegrating tablet formulation at 30 mg, taken three times a day. Shares of the company fell by 75% following the news.
Though FLX-787 had shown positive efficacy data in multiple sclerosis (MS) and ALS, but recent observations of oral intolerability at the current dose and formulation, in patients in both studies, indicate that more formulation and dose-ranging studies are required. However, this is challenging for the company considering the availability of its current resources.
The company’s Board of Directors and management are assessing strategic alternatives, including the potential sale or merger of the company. The company will continue to operate with a reduced internal team that will focus on assessing the potential of FLX-787 in dysphagia (difficulty swallowing) and operating the HOTSHOT consumer business, while the strategic review is ongoing.
Flex Pharma stated that it plans to reduce its workforce by approximately 60%. The layoffs will be implemented by the end of this month. As a result, the company expects to realize annualized cost savings beginning in the third quarter of 2018. The company expects to incur one-time costs of approximately $0.8 million to $1.1million under the restructuring plan.
Shares of the company have decreased 70.2% year to date, compared with the industry ’s decline of 6.9%.
Zacks Rank & Stocks to Consider
Flex Pharma has a Zacks Rank #3 (Hold).
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