Acusphere Announces Further Cost Reductions and Voluntary Filing of Form 15 to Suspend SEC Reporting Obligations
Wed, 03/04/2009 - 3:53am
Acusphere Inc. announced today its plan to substantially reduce costs while it continues its discussions with the U.S. Food & Drug Administration (FDA) about the regulatory path forward for its lead product candidate, Imagify(TM) (Perflubutane Polymer Microspheres) for Injectable Suspension. These cost reductions include a reduction in force, the termination of its lease in Watertown and the consolidation of operations at its manufacturing facility in Tewksbury, as well as the filing of a Form 15 with the U.S. Securities and Exchange Commission ("SEC") to suspend the company's SEC reporting obligations. These cost reductions are in addition to cost reductions previously announced in February 2009, involving the renegotiation of certain intellectual property agreements to push certain future payments into 2013. After successfully completing a Pre-Approval Inspection (PAI) by FDA, the Company announced today a planned reduction in force of 40 people, or about two-thirds of its employees, over the next several weeks. The reductions cut across all functional areas including manufacturing, quality systems, drug development, regulatory, finance and administration. These reductions are intended to extend the Company's cash position to accommodate continuing discussions with FDA. The Company also announced today the signing of an agreement to terminate the lease of its current Company headquarters in Watertown, Massachusetts and relocate all Company personnel to its facility in Tewksbury, Massachusetts. Under the agreement, the Company makes a one-time payment of $800,000 and forfeits its security deposit of $997,500. The Company will also make its final monthly payment of rent for March 2009 and pays estimated operating expenses of approximately $65,000 per month from April 2009 through July 1, 2009, unless the lease is terminated earlier by the landlord. The Company also announced today that it has voluntarily filed a Form 15 with the SEC to suspend the company's SEC reporting obligations. Upon the filing of the Form 15, the Company's obligation to file periodic and current reports with the SEC, including Forms 10-K, 10-Q and 8-K, were immediately suspended. Acusphere expects the registration of its common stock will be terminated 90 days after the filing of the Form 15 with the SEC. As a result of the Form 15 filing, the Company's securities will not be eligible for trading on any national exchange and will no longer be eligible for trading on the OTC Bulletin Board. Following the Form 15 filing, the Company's securities may be eligible for quotation on the Pink Sheets. An independent committee of Acusphere's Board of Directors voted unanimously to file the Form 15 after careful consideration of the advantages and disadvantages of continued reporting to the SEC. Suspending the Company's SEC reporting obligations will allow it to avoid the substantial legal, accounting and other expenses associated with reporting compliance and make those savings available for continued operation of the business. The suspension of the Company's reporting obligations will also enable management to focus more of its time and efforts on operating the business and enhancing shareholder value. Total annualized cash savings from reductions in staff are estimated to be approximately $3.9 million. The Company estimates it will take a one-time charge in the first quarter of 2009 of approximately $0.3 million associated with these reductions. Total annualized cash savings from the termination of the headquarters lease are estimated to be approximately $3.6 million with total savings, net of the one-time payment and deposit forfeiture, of an estimated $10.6 million through 2012, the original term of the lease. The Company expects to save approximately $800,000 in 2009 as a result of filing the Form 15 to deregister our shares. These actions, in combination with the actions announced last month, are expected to extend the Company's cash into the third quarter 2009 and provide additional time to explore strategic partnerships and financing alternatives as we continue to interact with the FDA. Among the anticipated reductions in staff are Lawrence A. Gyenes, Acusphere's Senior Vice President and Chief Financial Officer, who will leave the Company after completion of the year-end audit and other transition activities. There is no plan to replace Mr. Gyenes at this time. Sherri C. Oberg, Acusphere's President and Chief Executive Officer, said, "These decisions are extremely difficult but both appropriate and necessary given the current financing environment for life sciences companies, our continued belief that Imagify will be approved and our improved prospects for financing on more favorable terms after reaching agreement with FDA on the regulatory path forward for Imagify. We greatly appreciate the dedicated efforts of employees who have enabled us to reach this critical point for Imagify. In particular, I want to extend my thanks and gratitude to Larry Gyenes who has been an excellent partner for me and a great leader for the Company as a whole." Mr. Gyenes commented, "It has been a distinct pleasure to work with the many fine people at Acusphere and to play a pivotal role in helping to extend or add to the available cash to permit the Company to continue the review process with the FDA. I wish everyone the best of luck in the weeks and months ahead."