What happened

Shares of Theravance Bipharma (TBPH -0.79%) really took it on the chin Wednesday. Investors sold off the stock following another clinical-trial flop by the company, and its subsequent announcement of severe belt-tightening.

So what

This morning, Theravance divulged the top-line results from its phase 3 study of Ampreloxetine, a drug aimed at treating symptomatic neurogenic orthostatic hypotension (nOH, essentially a disorder in which the body does not effectively regulate blood pressure).

Stethescope atop US currency and insurance claim form.

Image source: Getty Images.

The data was hardly encouraging. Theravance admitted that the drug did not meet its primary endpoint of improving nOH in patients suffering from the disorder. This was particularly disappointing given that a 2018 phase 2 study showed positive top-line results for Ampreloxetine.

"We will continue to analyze the data to better understand the findings," Theravance quoted CEO Rick Winningham as saying.

The news comes less than a month after the biotech company's drug for inflammatory bowel disease, izencitinib, flopped in a phase 2 trial. Which, in turn, was two months after its COVID-19 pipeline drug nezulcitinib fell short in phase 2 testing.

With these defeats stacking up, on Wednesday Theravance also announced a set of "strategic actions" to better position its business for success. It said that the goal is "to focus on leveraging its expertise in developing and commercializing respiratory therapeutics in order to maximize shareholder value."

One major part of this initiative will be a reduction in its employee rolls by around 270 people, or roughly 75% of the workforce.

Now what

Theravance sounded a hopeful note in its update, adding that its moves should cut anticipated 2022 costs by around $165 million.

Much of that will come in research and development. In updating its R&D and its selling, general, and administrative cost guidance for the year, the company sharply reduced its projected spend in the former to $55 million to $65 million; previously it forecast $180 million to $190 million. 

SG&A expenses, meanwhile, should come in at $30 million to $40 million. That's down from the formerly anticipated $70 million to $80 million.