NEW YORK (GenomeWeb) – Curetis said today that it will eliminate up to 30 percent of its global workforce including the closure of sales subsidiaries in Europe as part of a strategic reorganization.
Based in Holzgerlingen, Germany, with additional offices in Amsterdam and San Diego, Curetis develops multiplexed PCR- and next-generation sequencing-based infectious disease diagnostics. These include the Unyvero system, for which the company received US Food and Drug Administration clearance in April, as well as related syndromic infectious disease panels, and the investigational ARESupa Universal Pathogenome Assay being developed by its subsidiary Ares Genetics.
Last month, the company reported its financial results for the first nine months of 2018, including 43 percent year-over-year revenue growth to €1.2 million ($1.4 million). However, the company's net loss for the nine-month period swelled to €17.7 million from a net loss of €14.6 in the prior-year period. Curetis exited the nine-month period with cash and cash equivalents of €5.5 million, down from €16.3 million at the end of 2017.
The company also said last month that it had raised €8.9 million through private placements after securing €20 million in growth capital in October through the issuance of convertible notes, and disclosed that it was assessing strategic options and operational requirements to secure funding for the next 12 months and ensure the availability of financial resources to continue as a going concern.
Today, Curetis announced the results of this strategic evaluation, noting in a statement that it will continue a "highly targeted US commercialization approach" for Unyvero and the associated Lower Respiratory Tract application cartridge for pneumonia, which also received FDA clearance in April. Specifically, Curetis said it plans to focus on high-volume early adopters for the test, while exploring further "commercial channel collaborations" alongside its direct US sales and marketing efforts.
In addition, the company has decided to rely more on distribution partners in Europe for the Unyvero product line. As such, the company will close its subsidiaries in France, the UK, the Netherlands, and Switzerland, which it expects will reduce its global headcount by up to 30 percent.
As a result, Curetis expects to reduce its net cash consumption in 2019 to €12.5 to €15 million from an expected cash burn of around €25 million for full-year 2018. Total restructuring costs are expected to be in the range of €200,000 to €400,000, and the company expects the reorganization to be completed by the end of the first quarter 2019.
Curetis also said that it will prioritize its R&D spending for the short and medium term, while seeking strategic partners for longer-term R&D initiatives, such as the late-stage development of the Unyvero A30 RQ, a low- to mid-plex molecular testing system intended to complement its current mid- to high-plex Unyvero A50 system.
Furthermore, Curetis is assessing options to raise additional capital through non-dilutive grant funding, via partnering and licensing, or through equity or debt funding using existing or future facilities. Thus far, the company has drawn €3.5 million on its €20 million convertible notes facility provided in October by YA II PN, an investment fund managed by Yorkville Advisors Global.
Curetis will also explore raising venture capital directly for its Ares Genetics subsidiary to accelerate its development of NGS-based infectious disease diagnostics, and said that it is "exploring a number of potential strategic collaboration opportunities that could help monetiz[e] Ares Genetics' assets for Curetis."
"To leverage the substantial value of key assets, such as the Unyvero Platforms A50 and A30 RQ and the broad patent portfolio of Ares Genetics, we will increasingly rely on earlier-stage partnering and asset-monetizing deals and are in numerous discussions with potential partners in the US, Asia, and Europe," Achim Plum, chief business officer for Curetis, said in a statement. "While such partnerships can provide additional non-dilutive funding for the execution of our business strategy in the short term, they will also contribute to maximizing the commercial potential of our platforms and offerings in the long run. We are also making good progress in attracting potential future direct VC funding to Ares Genetics to build a leading franchise in NGS-based infectious disease testing in Europe and the US."