After a surprise rejection from the FDA derailed Intercept’s plans to launch the first nonalcoholic steatohepatitis (NASH) drug, the company is cutting its workforce.
In a Securities and Exchange Commission filing Tuesday, Intercept unveiled plans to trim 25% of its headcount, or about 170 jobs. The company will take an $18 million charge in connection with the downsizing for severance pay and other termination costs.
After the FDA rejection, Intercept aims to cut operating expenses while maintaining its infrastructure to press ahead toward its goals in NASH and primary biliary cholangitis. Intercept’s obeticholic acid is already approved in primary biliary cholangitis as Ocaliva, but the company had hoped to win an approval for the medicine treat liver fibrosis due to NASH.
Instead, in June, the FDA issued a Complete Response Letter for the medication, saying the drug’s “predicted benefit … remains uncertain” and doesn’t warrant safety risks in patients with NASH-related liver fibrosis.
Intercept was caught off-guard by the move, with CEO Mark Pruzanski saying at the time that at “no point during the review did the FDA communicate that OCA was not approvable on an accelerated basis.” Further, the company believed “the totality of data submitted to date both meet the requirements of the agency’s own guidance and clearly support the positive benefit-risk profile," he said.
The rejection followed other regulatory snafus for the company and its NASH application for obeticholic acid. Earlier in the process, the application suffered delays over advisory committee scheduling and the COVID-19 pandemic.
Last year, Intercept chief commercial officer Jerry Durso told Wall Street analysts the company had made “significant progress” toward the rollout by starting payer talks and hiring sales staffers.