Neothetics Inc (NASDAQ:NEOT) issued a business update and posted financial report for the third quarter 2017. In July 2017, the company reported that its Board unanimously permitted plans to commence a process to review and explore a range of strategic options focusing on looking an acquisition, partnership or business combination that will enable for it to enhance shareholder value from its remaining cash resources and assets.
Neothetics involved Oppenheimer & Co., Inc. to serve as its financial advisor for this procedure. The firm also streamlined its businesses in order to preserve its cash resources and capital, including implementing a decline in the firm’s workforce. The workforce was condensed to three employees during Q3 2017 and the fir projects to complete the decline to two employees in Q4 2017 or Q1 2018.
In October 2017, the company reported it had finalized a definitive merger deal under which a 100% owned subsidiary unit of Neothetics will merge into and with Evofem Biosciences, Inc. The firms project that the merger will place the combined firm with a prospect to become a major women’s health firm that commercializes and develops novel products.
Upon completion of the deal, Neothetics name will be changed to Evofem Biosciences, Inc. It will be under the direction of Evofem CEO, Saundra Pelletier. R&D expenses for Q3 2017 were around $0.5 million versus $1 million for the comparable quarter in 2016.
The decline in research and development expenses YoY was mainly due to closure of the majority of the close-out initiatives for their AbCONTOUR2 and AbCONTOUR1 U.S. Phase 3 clinical studies and supplemental clinical studies and the lowering of personnel and other R&D activities. The declines were offset by the costs incurred in 2017 for the Phase II proof-of concept clinical study for the lowering of contained fat deposits below chin and severance expenses.