After FDA Regulatory Setback, Penny Stock ObsEva Cuts 70% Of Its Staff

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After running into a major roadblock at the FDA for its uterine fibroid drug, ObsEva SA OBSV has flagged plans for significant layoffs as part of a wholesale restructuring under the supervision of the supervision court-appointed administrator.
In an update, ObsEva plans to lay off approximately 70% of employees, including Katja Buhrer, Chief Strategy Officer.
The company intends to complete the terminations in Q4 and shave $7.6 million off its annual expenses.
In August, the company said it is facing a delisting threat from Nasdaq.
Related: This Women's Health Stock Gets Analyst Downgrade On 'Approvability Issues, Restructuring.'
ObsEva had an oral GnRH receptor antagonist, linzagolix. Although it managed to secure approvals from the EU and the U.K., the FDA found deficiencies in its marketing application, hinting at a delay.
The remaining team will manage the two partnered programs ObsEva decided to keep.
Ebopiprant, licensed by Merck & Co Inc's MRK spinout Organon & Co OGN.
Nolasiban is a drug it believes could be used to improve in vitro fertilization. It has a regional pact with China's Yuyuan Bioscience Technology around this program, but CEO Brian O'Callaghan noted the company is "assessing the potential for further nolasiban development."
Price Action: OBSV shares are down 3.36% at $0.19 during the premarket session on the last check Tuesday.