Some two years after braving the pandemic to launch its oral testosterone replacement tablet Jatenzo, Clarus Therapeutics is in dire straits. The company hopes layoffs and R&D culls can help right the ship, but Clarus has “substantial” doubts about its future and may even have to yank its flagship product off U.S. shelves if things don’t improve
Thanks to its sole commercial drug Jatenzo, Clarus logged a second-quarter net revenue increase of 46% year over year. Still, that only amounted to sales of $4.1 million, the company said in a release. For the first half of the year, Clarus ginned up $8.1 million in net revenue.
Meanwhile, Clarus had about $19.2 million on hand as of June 30, with an “accumulated deficit of $347.2 million and $40.5 million of senior notes payable,” the company explained. With that, Clarus thinks it can stay afloat into September 2022.
However, “if we are not able to restructure our indebtedness and obtain necessary capital, we may be required to discontinue our commercialization efforts for Jatenzo, liquidate all or a portion of our assets and/or seek protection under the provisions of the U.S. Bankruptcy Code,” the company warned, adding that “these matters raise substantial doubt about our ability to continue as a going concern.”
Clarus now needs to make some “strategic changes” to its business given a “difficult financing environment,” the company’s CEO, Robert Dudley, Ph.D., said in a statement.
Specifically, Clarus is charting an “immediate” 40% staff reduction, which is expected to wrap up in August. Plus, it’s bidding adieu to Chief Financial Officer Ric Peterson, who’s handing the commercial reins to current chief administrative officer and former Clarus CFO Steve Bourne. Beyond trimming its workforce, the company is more broadly evaluating “strategic alternatives” and axing certain research and development activities, Clarus said in its release.
“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,” Dudley explained, calling the difficult move a “responsible course of action.”
One project that’s landed on the chopping block is Clarus’ pact with HavaH Therapeutics on testosterone and anastrozole combo prospect CLAR-121, which was being developed to treat inflammatory breast disease and certain forms of breast cancer, according to Clarus’ release.
After an April 2019 approval for Jatenzo, the company launched its first product in February 2020. But just as the launch got underway, COVID-19 ripped through the U.S.
"[Launching a new drug] is a challenging task, and it turned out to be a lot more challenging than I thought," Dudley told Fierce Pharma back in 2020.
Clarus had to adapt its commercial strategy as the world got used to Zoom screens, isolating and social distancing.
"In this environment, you have to be nimble," Dudley said at the time. "This is why I think we’ve been able to maintain forward momentum when it could have just crashed and burned."
Now, Clarus’ future looks hazy once more.
Over the second three months of 2022, total Jatenzo prescriptions grew 23% sequentially and 72% year over year, Clarus added in its release. The company credited those gains to “advertising and promotion and an increase in payer coverage across all payer channels.”