Aquinox Pharmaceuticals, Inc. (NASDAQ:AQXP) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05. Costs Associated with Exit or Disposal Activities.
On July3, 2018, the Compensation Committee of the Board of Directors of Aquinox Pharmaceuticals, Inc. (the “Company”) approved a restructuring plan to reduce operating costs and better align the Company’s workforce with the needs of its business following the June27, 2018 announcement that its Phase 3 LEADERSHIP 301 clinical trial evaluating once-daily, oral rosiptor (AQX-1125) for the treatment of interstitial cystitis/bladder pain syndrome (IC/BPS) failed to meet its primary endpoint. The Company has halted all further development activities with rosiptor.
Under this plan, the Company reduced its workforce by 30 employees (approximately 53%) and closed its office in San Bruno, California. Affected employees are eligible to receive severance payments and outplacement services. Employee severance benefits are contingent upon an affected employee’s execution (and non-revocation) of a separation agreement, which includes a general release of claims against the Company.
In connection with the restructuring, the Company estimates that it will incur aggregate restructuring charges of approximately $2.5million related to one-time termination severance payments and other employee-related costs and the shut-down of its San Bruno office. The majority of the cash payments related to the personnel-related restructuring charges will be paid during the third quarter of 2018, with the remainder to be paid during the fourth quarter of 2018. The charges that the Company expects to incur in connection with the workforce reduction is subject to a number of assumptions, and actual results may differ materially. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the workforce reduction.
ThisItem 2.05contains forward-looking statements, including, but not limited to, statements related to the expected costs associated with termination benefits and the financial impact of the reduction in force. These forward-looking statements are based on the Company’s current expectations and inherently involve significant risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to cost reduction efforts. In addition, the Company’s workforce reduction costs may be greater than anticipated and the workforce reduction may have an adverse impact on the Company’s development activities. A further description of the risks and uncertainties relating to the business of the Company is contained in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March31, 2018, filed with the Securities and Exchange Commission (the “SEC”) on May8, 2018, and the Company’s subsequent current reports filed with the SEC. The Company undertakes no duty or obligation to update any forward-looking statements contained in thisItem 2.05as a result of new information, future events or changes in its expectations.
About Aquinox Pharmaceuticals, Inc. (NASDAQ:AQXP)
Aquinox Pharmaceuticals, Inc. is a clinical-stage pharmaceutical company discovering and developing targeted therapeutics in disease areas of inflammation and immuno-oncology. The Company operates in the segment of identification and development of therapeutics in disease areas of inflammation and immuno-oncology. Its primary focus is anti-inflammatory product candidates targeting the Src Homology 2 (SH2)-containing inositol-5-phosphatase 1 (SHIP1) enzyme, which is a regulator of a cellular signaling pathway in immune cells. The Company’s product candidate, AQX-1125, is a small molecule activator of SHIP1 suitable for oral, once daily dosing. The Company is developing AQX-1125 as a treatment in interstitial cystitis/bladder pain syndrome (IC/BPS), a chronic inflammatory disease of the bladder. It has completed and reported results from its Leadership trial, which is a multicenter, randomized, double-blind, placebo-controlled, Phase II clinical trial.