Delcath Systems will move its headquarters from New York City to Queensbury as part of a cost-cutting program that includes fresh layoffs, following news Monday that U.S. Food and Drug Administration approval of the firm’s cancer-fighting system has been delayed.
The company said it plans to reduce its workforce by approximately 21 percent this year.
It was unclear Tuesday how many positions were being cut in the New York City office, but Delcath President and CEO Eamonn Hobbs said there would be no additional cuts in the company’s local facilities.
The remainder of the New York City operation is being moved to less expensive space in New Jersey as part of the program, according to the company statement.
It was unclear Tuesday what other impacts would be felt locally as the headquarters is moved to the region.
At last report, Delcath employed a total of about 60 in leased space at the Cool Insuring building on Quaker Road and at a company-owned production facility on County Line Road in Kingsbury, though that number was disclosed before a February layoff the company refused to quantify.
“We’ve made some minor workforce adjustments in Queensbury to allocate our resources to match our 2013 needs globally,” Delcath officials said at the time.
Similar language was used in this week’s announcement about the cost-cutting programs.
“The expansion of these programs will significantly increase our organizational efficiencies, reduce expected cash burn in 2013 and provide the necessary resources to fund our three key strategic priorities,” Hobbs said. “Our team is highly focused on preparations for our May 2 Oncologic Drugs Advisory Committee panel meeting, as well as our ongoing dialogue with the FDA regarding their review of our (new drug application) submission.”
Two senior-level executives — in charge of global sales and business development — have been eliminated, according to the company statement. Delcath has appointed Executive Vice President, Global Head of Business Operations Jennifer Simpson to take on some of those tasks, while Hobbs and Delcath Chief Financial Officer Graham Miao will absorb the remainder of those duties.
Simpson joined Delcath in March 2012 as executive vice president, global marketing.
Delcath expects the changes to reduce its quarterly spending rate to a range of $9 million to $10 million from $9 million to $12 million.
The announcement follows news Monday that the FDA pushed back the date by which it expects to deliver an approval decision on Delcath’s Chemosat cancer treatment system.
Previously, the FDA planned to render its decision on whether the system can be sold in the U.S. by June 15. But after Delcath provided additional information on the system to the agency — at the FDA’s request — the agency decided to take extra time to review the new data.
The FDA is now expected to deliver its decision by Sept. 13.
Delcath’s Melblez Kit, also called Chemosat, targets cancers of the liver, though the company plans to expand its use to other types of cancer and other organs.
The system, which has approval for sale in European Union nations, uses high-tech catheters to isolate the liver before delivering concentrated doses of the chemotherapy drug. The system then filters the drug out of patients’ blood before returning it to their bodies.
Monday’s announcement followed an agreement by Delcath in December to alter its application upon advice from the FDA.
The company initially sought approval for the treatment of skin cancer that had spread to the liver. The revised application narrows the sought-after approval to cancer of the eye that has metastasized to the liver.
Delcath submitted its original application Aug. 15 with a request the application receive “priority review” status, which would have shortened the review period to about four months. The agency denied that request, opting for the longer review period.
Delcath went public in 2000 and has yet to post a profit, as it works to bring its system to markets worldwide.
The company employed a total of about 100 worldwide earlier this year.
Shares of Delcath’s common stock closed down 13 cents each at $1.52 Tuesday, a 7.9 percent loss.
That selling followed a similar market reaction Monday.