After the markets closed yesterday, Encysive Pharmaceuticals
Thelin has been approved for marketing in the EU, Canada, and Australia, but Encysive has been rapidly burning its cash to build up a marketing team to cover all these territories.
Encysive isn't giving up on getting the drug approved in the U.S. and reiterated its goals to try and fix the deficiencies in the approvable letter. But with approval of Thelin in the U.S. now several years away at the earliest, the company smartly decided to cut its idle sales force in this country and reduce the U.S. headcount by 70%.
Encysive also announced that a new CEO would be stepping in to replace Bruce Given. Once you get past the formal salutations in the press release for his years of work at the company, it's clear that Given was probably made to leave for the handling of Thelin's marketing application in the U.S. While not a fresh face from outside of Encysive, the new CEO does restore some of the lost credibility that the company accrued over the past year.
Altogether these money-saving maneuvers are expected to reduce Encysive's cash burn to $20 million next quarter and $15 million in the fourth quarter. Even with this reduced rate of cash burn, there will be more dilutive financings in its future, as Encysive will end the year with its cash balances in the low $20 million range. Now that U.S. marketing approval is out of the near-term picture, the question remains whether the rest of its world sales will be enough to get Encysive to profitability in the coming years.