Just weeks after disappointing news regarding its potential billion-dollar drug satraplatin was swiftly followed by a class action lawsuit against the company, GPC Biotech has announced plans to cut 15 per cent of its workforce.
With lawsuits looming and the company's plans for its novel oral prostate cancer drug, satraplatin, delayed by a year or more, the swathe of job cuts perhaps comes as no surprise.
However, less than two weeks ago the company was still maintaining that it was in a "solid financial position" and able to progress with the extended satraplatin plans fairly comfortably, though admitted immediate cost-cutting measures were underway to try and save €10m.
The job losses announced today affect staff at the company's US operations, where it has just spent considerable time and money establishing a strong sales and marketing force in anticipation of gaining US approval of satraplatin.
The cuts will be made in commercialisation, administration and drug development, with a total of 46 people due to lose their jobs at the company.
"We are retaining a core commercialisation group for pre-launch activities," Martin Braendle of GPC told in-PharmaTechnologist.com.
"And we are pursuing other opportunities to leverage the remaining sales force."
GPC fortunes seem to have spiralled over the course of the last month, sparked by a decision by a US Food and Drug Administration (FDA) advisory committee at the end of July.
From sitting comfortably with a promising pipeline, strong lead candidate and favourable analyst opinion, the company's outlook started to take a turn for the worse when the US Oncologic Drugs Advisory Committee (ODAC) recommended that the FDA hold off on approval of satraplatin until final survival analyses were in.
A week or so later, the company announced that it was being sued in the United States District Court in a class action suit claiming that it had made false public statements relating to the prospects of satraplatin, and thus artificially inflated the price of GPC securities.
Three days later the company the company announced that it had withdrawn the satraplatin capsule new drug application (NDA) that had been filed for accelerated approval with the FDA.
Although the company plans to re-file within six months when final survival statistics from its clinical trial are available, the whole episode has proved a considerable blow to the company.
GPC had not foreseen the hurdle placed in its path by the ODAC opinion and the resultant delay in approval, and had originally hoped to launch satraplatin on the market as early as the end of this year.
"We expected sales in the fourth quarter this year - it will now be a year later," said Braendle.
"We had to revisit our staffing and certain other activities."
The year-long delay in potential approval, combined with having already established a now somewhat powerless sales force in the US, and compounded further by the class action lawsuit, would understandably have set GPC's heads spinning.
However, Braendle is adamant that the filing of the lawsuit had absolutely no influence on the decision to cut jobs at the company, and reiterated the fact that GPC believes the allegations to be without merit and will defend itself vigorously.
Although the company is still pursuing other cost-cutting measures, it is not expected that staffing will be further affected. It will now be a case of waiting to see what happens in five months or so when the final survival analyses for satraplatin are in and the company can resubmit its application to the FDA, and how much of a toll the class action suit will take on the firm's fortunes.