Phosphagenics restructure effective immediately

Drug delivery company Phosphagenics (ASX: POH) yesterday announced a corporate restructure, effective immediately, following its recent strategic review.

The restructure will reduce the company’s early-phase higher risk research activities and redirect resources towards ensuring delivery of its short- to medium-term later stage development projects with higher probability of success. It will also involve a reduction of up to 10 staff positions and a change to a more outsourced model for several previously in-house activities.

“Not all of the changes we have made to the business over the past few months have been easy, particularly those that involve reducing staff numbers, but all have been made with the same goal in mind: optimise the delivery of value from our key assets,” said the company’s CEO, Dr Ross Murdoch.

“The decision to streamline our operations and reduce our focus on early internal research will not only ensure that we can deliver key milestones as quickly and cost effectively as possible, but also that we have the financial runway to capitalise on these.”

Moving forward, Phosphagenics will focus its resources on delivering a select number of priorities across three business areas. The company’s Bulk Production and Personal Care business will focus on the development of a reactor to upgrade its manufacturing facilities in anticipation of increased demand in 2016.

For the company’s Animal Health and Nutrition business, a comprehensive program involving multiple proof-of-concept studies across multiple species is planned for 2015–16. The program is designed to provide proof-of-principle for TPM as a food additive and also the appropriate data to satisfy the requirements of both regulatory agencies and potential partners.

Finally, the company’s Human Health and Nutrition business is targeting two key outcomes for this quarter: completion of enrolment and the delivery of initial results for the Phase 2 proof-of-concept with the TPM/Oxycodone patch; and the agreement with a major manufacturing company for the initiation of the reformulation of the TPM/Oxymorphone patch.

“With these changes, Phosphagenics is able to extend its financial runway well into 2017 improving its ability to deliver our high-priority, short- to medium-term later phase projects, such as the opioid patch development programs, the animal health and nutrition trials and the TPM manufacturing expansion project,” Dr Murdoch said.

Phosphagenics (ASX: POH) shares were trading 14.29% higher at $0.016 as of around 10.30 am on Tuesday.