Echo Therapeutics Inc. is implementing a wide-scale cost reduction plan that includes the layoffs of 33 percent of its workforce. Affected employees were notified in late September.
"It's important to recognize this shift as part of a continuing effort to focus our efforts and resources on our short-term corporate objectives in order to drive future shareholder value," Executive Chairman/Interim CEO Robert F. Dorman said. "I strongly believe in our management team's ability to execute on our plan to better position the company to realize its long-term potential. We highly value all of our employees and deeply regret having to make these workforce reductions. However, these reductions were essential to better align ongoing expenses with our short-term objectives and position Echo for future growth."
The Philadelphia, Pa.-based firm also is reducing marketing and manufacturing expenditures as well as general corporate and administrative costs to reduct its fourth-quarter burn rate by 35 percent to 40 percent.
The cost-reduction plan was announced shortly after the sudden resignation of former Chairman/CEO Patrick T. Mooney, M.D. Echo executives did not provide a reason for his departure; a company statement simply thanked him for his service and wished him well in his future endeavors. William Grieco, chairman of the firm's Nominating and Corporate Governance Committee, is spearheading the search for Monney's successor.
Despite the layoffs and austerity measures, Echo is continuing enrollment in a European clinical trial of its Symphony continuous glucose monitor in its bid for CE Mark approval, although unexpected delays have pushed back trial deadlines by a quarter. Echo plans to apply for CE Mark approval late this year. The cutbacks also won't affect the multi-center U.S. Food and Drug Administration clinical trial the company plans to initiate in the second half of next year for its Symphony CGM System.
Echo develops advanced skin permeation technology.