UPDATE 1-Transcept cutting jobs after FDA rejects drug
* To cut about 45 pct; had workforce of 31 on March 15
* Cut comes after FDA rejects sleep-disorder drug
* Says to record a charge of about $1.1 mln in Q3
July 15 (Reuters) - Transcept Pharmaceuticals Inc TSPT.O said it would cut about 45 percent of its workforce after the U.S. Food and Drug Administration denied approval of its sleep-disorder drug Intermezzo.
The company, which as of March 15, 2011, had 31 employees, expects a restructuring charge of about $1.1 million in the third quarter. It also expects to record a stock compensation charge related to modifying certain stock options as a result of the restructuring, in the same period.
As a result of the restructuring, it expects to reduce annualized payroll and benefit expenses by about $2.1 million.
"Our staffing needs have changed after the recent news from the FDA on the regulatory status of Intermezzo. We are therefore phasing out certain positions that are non-essential to our plan," Glenn Oclassen, chief executive officer, said in a statement.
The company's insomnia drug, whose proposed label was Intermezzo, was denied approval by regulators, who cited concerns it could impair driving ability the day after it was taken. [ID:nL3E7IF0QW].
Transcept's shares have lost 45 percent since the drugmaker revealed earlier on Tuesday it expected a rejection but has since recouped some of its losses as investors felt the drug's efficacy in treating sleep disorder remained unquestioned.
Shares of the Richmond, California-based company closed 3 percent higher at $4.87 on Friday on Nasdaq. (Reporting by Siddharth Cavale in Bangalore; Editing by Gary Hill)
Trending On Reuters
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video