Struggling penny stock biotech lays off 40% of staffers to stay afloat — for a few more weeks

19 Aug 2022
endpts.com
The clock is ticking for penny stock biotech Clarus Therapeutics.
With $19.2 million left in the bank and $40.5 million of senior notes payable, the company is pulling out all the stops to stay afloat — axing 40% of its workforce and closing down R&D programs while it explores strategic alternatives. Clarus also decided to combine the positions of chief financial officer and chief administrative officer. As a result, CFO Richard Peterson will leave the company while CAO Steven Bourne picks up his job.
The biotech markets an oral testosterone replacement drug named Jatenzo, and it’s been working on other androgen replacement and metabolic therapies. The reorg will keep the lights on until September 2022, the company noted — but it may have to stop marketing Jatenzo and file for bankruptcy unless it can restructure its indebtedness and find new capital.
Like many of the biotechs in distress these days, Robert Dudley, Clarus president and CEO, blames the moves — which come even as Jatenzo sales have grown — on the difficult financing environment.
“These changes will include staff reductions at all levels, including field sales personnel, coupled with significant reductions in promotional and other operational spend, including in our planned research and development activities,” he said in a statement. “Despite these difficult choices, we believe it is the responsible course of action.”
The company has terminated its deal with HavaH Therapeutics to develop CLAR-121, a formulation of testosterone plus anastrozole to treat inflammatory breast disease and certain forms of breast cancer.
Clarus expects severance and related expenses for the layoffs to add up to $1.1 million.
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