Rare Drug Developer Chiasma Lays Off More Workers After FDA Impasse

Chiasma, whose application for FDA approval for its drug for acromegaly was denied in April, is cutting 44 percent more of its workforce to keep itself afloat as it tries to figure out its path forward in the U.S.

Since May, Chiasma (NASDAQ: [[ticker:CHMA]]) has reduced its total workers by 60 percent, leaving it with 25 executive, clinical, regulatory, and administrative employees, the company says. The Waltham, MA-based company announced in April that the FDA denied its request to approve octreotide (Mycapssa) for acromegaly, a rare disease that causes patients to produce too much human growth hormone. About 69,000 people suffer from it, according to Chiasma.

The FDA said it would need more evidence from Chiasma to warrant approval of the drug. Chiasma said in June it is exploring whether submitting additional clinical analysis, data, or some other means might earn approval. The company is studying the drug in a Phase 3 trial focused on getting the regulatory nod in Europe.

Chiasma fell 1.9 percent in trading as of 10 a.m. in New York Tuesday to $2.88 per share.

Author: David Holley

David is the national correspondent at Xconomy. He has spent most of his career covering business of every kind, from breweries in Oregon to investment banks in New York. A native of the Pacific Northwest, David started his career reporting at weekly and daily newspapers, covering murder trials, city council meetings, the expanding startup tech industry in the region, and everything between. He left the West Coast to pursue business journalism in New York, first writing about biotech and then private equity at The Deal. After a stint at Bloomberg News writing about high-yield bonds and leveraged loans, David relocated from New York to Austin, TX. He graduated from Portland State University.