MONTREAL, Aug. 2, 2016 /PRNewswire/ - Telesta Therapeutics Inc. (TSX: TST)(PNK: BNHLF) Telesta Therapeutics today announced concrete actions and decisions stemming from its ongoing strategic review process focussed on preserving shareholder capital and growing shareholder value. These decisions and actions can be summarized as follows:
- Termination of future expenditures on MCNA1;
- Significant streamlining of the Company's workforce;
- Additional cost reductions and ongoing efforts to maximize asset sale proceeds;
- Continuing evaluation of strategic options.
Telesta today announced that it has executed a Termination Agreement with its European partner, Ipsen, which provides for the return of all of the former rights granted to Ipsen for the MCNA program in Europe and some other jurisdictions. Since Telesta's End of Review Type A meeting with the FDA in April, Telesta has determined that there is no reasonable assurance that a development partner in any region of the world can be found for MCNA in the short term. As such, Telesta will cease to expend any significant effort or funds to find a partner or further develop this asset and Telesta will close its Montreal-based manufacturing facility, seeking a buyer for this facility while reducing ongoing intellectual property expenditures to a minimum.
Telesta has implemented a significant workforce reduction that will decrease its operational workforce, to 15 full time employees from 50 people at March 31, 2016 and 32 as at June 30th. Another 4 employees will be maintained at the Company's two manufacturing facilities during the time required to monetize these facilities.
Cost Reductions/Asset Sales
In addition to the workforce reductions discussed above, Telesta has implemented significant expenditure controls to ensure that all spending is directed to contractual obligations, the costs of operating a public company and the costs required to continue the ongoing evaluation of strategic options. Additional information on the magnitude of these efforts and the estimated ongoing monthly operational burn will be provided in the press release accompanying the release of our 4th quarter and annual results, which is projected to be during the 3rd week of September.
Telesta is seeking to monetize two former manufacturing assets, the Belleville Ontario-based "Vaccine Manufacturing Centre" (VMC) and the Montreal MCNA manufacturing site. There has been renewed interest in the Belleville facility, where Telesta will continue to work with its broker, Pharmabiosource, to identify a pharmaceutical buyer. Telesta has recently renewed its lease with a 3rd party for a portion of the VMC through April 2018, and the continued operation of this facility remains cash neutral for Telesta. As such, it is rational to work to find the right buyer, even though the sales process had taken longer than originally envisaged. Telesta is interviewing brokers for the smaller Montreal facility, and will take the time necessary to ensure that an optimal sales price is achieved.
1 Mycobacterium phlei cell wall-nucleic acid complex
Strategic Review Process
Over the last 120 days, Telesta's management team and Board of Directors have carefully evaluated multiple strategic options, in parallel with their efforts to determine the ongoing value of the MCNA program and to optimize the sales proceeds from the disposition of non-core assets. While Telesta will continue to evaluate all of its strategic options, Telesta's Board of Directors has determined that selling Telesta for its net cash and public listing or liquidating the company for the distributable cash, does not provide Telesta's shareholders with a return that is meaningfully different from current price levels, after accounting for related fees, severances and uncertainty concerning the value to be received from non-monetized assets.
To that end, Telesta will:
- Continue to identify opportunities to reduce monthly operating expenditures to conserve cash balances;
- Conduct a process to optimize proceeds from the sale of non-core assets to increase cash balances;
- Seek to in-license or acquire clinical or near clinical therapeutic assets that can be driven to significant valuation enhancement points;
- Continue to review acquisition/merger opportunities that could provide significant upside for Telesta shareholders.
About Telesta Therapeutics Inc.
Telesta is a Montreal-based biotechnology company focused on the licensing/acquisition and development of transformational therapeutics for the treatment of serious human diseases such as cancer, immune diseases and targeted rare diseases. We are agile, pragmatic, efficient, and driven by a passion for breakthrough science, drug development and making a difference in the lives of patients and their families. Through our strong convictions, work ethics, and collaboration-driven approach, we are leveraging our deep expertise and skillsets to bring transformational medicines to patients and their physicians.
Except for historical information, this news release may contain "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws that reflect the Company's current expectation regarding future events. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while, considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Readers are cautioned that any such forward-looking statements and information are not guarantees and there can be no assurance that such statements and information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements and information. These forward-looking statements and information involve risk and uncertainties, which may cause, but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process, and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.
SOURCE Telesta Therapeutics Inc.