Zosano Pharma's migraines are getting worse: The biotech is looking at strategic alternatives and laying off 31% of its staff. The news follows last month's FDA decision to decline to review the company's already-rejected drug.
The company's shares were down nearly 7% to less than 20 cents apiece in aftermarket trading Thursday.
Feb. 17, the FDA told the company that it would not take the time to look at Zosano's resubmission of its migraine patch, M207. The agency rejected the drug in October 2020, while Zosano had submitted its request in December 2019.
M207, known as Qtrypta, includes a new delivery system for migraine drug triptan zolmitriptan. But Zosano's resubmission did not show a "complete response to the deficiencies" outlined in the agency's 2020 rejection, the company revealed in a Securities and Exchange Commission (SEC) filing last month.
That means Zosano has to find ways to stay alive. One route: getting rid of 31% of its 40-employee staff. The company had 29 R&D employees at the end of 2021. Now, it has 21, according to Zosano's 10-K filing Thursday. The company also raised $15.4 million in gross proceeds from a public offering last month.
Zosano said it was still in discussions with the FDA. The Fremont, California, biotech wants "to determine if there is a viable option to pursue approval of M207 using the currently available clinical data," said Steven Lo, CEO and president, in a statement.
But even if the company is able to get the drug approved, it will likely face more hurdles, according to the SEC filing.
"If the NDA for M207 is successfully resubmitted and approved by the FDA, we will only be able to produce limited quantities of M207 at our Fremont, California location, and we will not be able to produce M207 drug product on our manufacturing equipment at our third-party CMOs without subsequent FDA approvals, which may require us to conduct additional clinical studies and incur significant time and cost, and we may not be successful."
These woes are far from the only roadblocks Zosano has hit in recent years. The company stopped enrolling patients in a midstage study of its second asset, C213, in December 2020 because of the COVID-19 pandemic. The drug was being tested as a treatment for cluster headaches.
Prior to the pandemic, Zosano also lost multiple partners. Novo Nordisk ditched a diabetes pact in July 2015, and Eli Lilly backed out of a collab two months later.