Gemphire Therapeutics to cut 33% of staff and take a $1.4M related charge
Gemphire Therapeutics announces that its board has approved a workforce reduction in order to reduce costs and conserve cash resources. This decision was made in light of the previously announced request by the Food and Drug Administration or additional pre-clinical data required in order to schedule an End of Phase 2 meeting for gemcabene in the company's target dyslipidemia indications. The workforce reduction includes five employees, which represent approximately 33% of the Company's workforce, as of September 18, 2018. Two of the five employees include Jeffrey S. Mathiesen, the company's Chief Financial Officer, and Lee Golden, the Company's Chief Medical Officer. Mr. Mathiesen and Dr. Golden each depart in good standing with the company. Mr. Mathiesen has agreed to act as a consultant to Gemphire for a period of eight months, to provide advice on certain financial and accounting matters. Effective September 18, 2018, the Board designated Dr. Steven Gullans, the company's President and Chief Executive Officer, as the principal financial officer and principal accounting officer of the Company. As a result of the workforce reduction, the Company expects to record severance related charges totaling approximately $1.4 million, which includes one-time cash severance payments of $0.5 million, a non-cash charge of approximately $0.9 million related to the accelerated vesting of outstanding stock options for certain affected employees and $26,300 for continued health insurance coverage. The majority of the cash payments relating to personnel-related restructuring charges will be paid during the fourth quarter of 2018. The charges that the Company expects to incur in connection with the workforce reduction are estimates and subject to a number of assumptions, and actual results may differ materially. The Company may incur additional costs not currently contemplated due to events associated with or resulting from the workforce reduction.