NEW YORK (AP) -- Shares of Delcath Systems Inc. slid further Tuesday after the medical device company said it will eliminate jobs and move its headquarters to reduce its spending.
THE SPARK: After the market closed on Monday, Delcath said it will cut costs by eliminating 21 percent of its staff positions. It also plans to move its New York City operations to a less expensive satellite office in New Jersey. The address of its headquarters will change to its Queensbury, N.Y., facilities.
Delcath had 92 employees at the end of 2012. The 21 percent cutback figure implies the company will reduce its staff to about 73.
The job cuts include the elimination of two executive positions: head of global sales and head of business development. The company's business development responsibilities will be handled by President and CEO Eamonn Hobbs and Chief Financial Officer Graham Miao. Jennifer Simpson, who has been in charge of global marketing for Delcath, will take charge of sales operations. Simpson's title is now global head of business operations
Delcath said the changes will reduce its quarterly spending to a range of $9 million to $10 million from $9 million to $12 million.
THE BIG PICTURE: Monday morning Delcath said the Food and Drug Administration will take an extra three months to review its experimental treatment for liver cancer. The company said the FDA will make a ruling on its Melblez system by Sept. 13.
Melblez is designed to treat cancer by delivering high doses of the chemotherapy drug melphalan directly to the liver while controlling exposure of the rest of the body. Delcath has asked the FDA to approve the system for use in the treatment of inoperable ocular melanoma, a cancer of the eye, when it spreads to the liver.
The system is available in Europe under the name Chemosat.
THE ANALYSIS: Wedbush analyst Gregory Wade said he expects an FDA panel to make a favorable recommendation on Melblez in May and believes the product will be approved. He kept an "Outperform" rating on Delcath shares with a price target of $5.
SHARE ACTION: Delcath stock sank 16 cents, or 9.7 percent, to $1.49 in afternoon trading. The shares fell 12 cents, or 6.8 percent, to $1.65 on Monday. Delcath shares have ranged between $1.01 and $3.22 in the last year.