Switzerland’s Arpida says that its board of directors has approved a recently-announced set of cost-cutting measures as it gets to grips with a US regulatory panel’s rejection of the intravenous antibiotic iclaprim.

The Reinach-based firm’s workforce has been cut to 20 from 80 and a Phase II trial for iclaprim in pneumonia has been halted. Enrolment into an ongoing Phase III trial for onychomycosis (nail infections) has also been stopped. The heads of research (Sergio Lociuro) and development (Paul Hadvary) are leaving Arpida “by mutual agreement”.

These measures will reduce the firm’s monthly burn rate to around one million Swiss francs (about $875,000) per month from April onwards and Arpida expects to have 17 million francs in cash by the end of 2009.

Arpida’s problems stem from a month or so ago when the US Food and Drug Administration’s Anti-infective Drugs Advisory Committee voted 17 to two against the approval of iclaprim, which had been filed for the treatment of patients with complicated skin infections, including those caused by methicillin-resistant Staphylococcus aureus (MRSA). “The situation that arose from the unexpected negative recommendation of the FDA’s advisory committee is calling for quick and resolute action”, chairman Andre Lamotte said, while chief executive Juergen Raths noted that “having to dismiss employees is very sad, yet unavoidable in order to buy time to consider and develop strategic options”.

He added that “with the new lean organisation we are ready for the challenges that we are facing.” They will involve getting the full response letter from the FDA and the report from the European Medicines Agency and after a “thorough analysis, including external expert advice”, Arpida will decide what to do with iclaprim.