Cingulate, the clinical stage biopharmaceutical company, faced a significant exodus of officers and board members this week. The retiring chief financial officer, Louis Van Horn, stepped down two days prior to the company’s disclosure. In the interim, Chief Executive Shane Schaffer will assume the role until a suitable replacement is found.
Another resignation came from Craig Gilgallon, the general counsel, effective Friday. This was followed by Patrick Gallagher’s resignation from the board on Tuesday. Directors Gregg Givens and Curt Medeiros echoed the action on Wednesday.
Previously, the board was notified that Scott Applebaum would be leaving. All departures, however, were amicable and unrelated to any disagreements with the company’s operations, policies, or practices.
In light of this situation, Cingulate has implemented cost-cutting measures. Schaffer’s base salary will be reduced by 55% to $226,350, while Chief Operating Officer Laurie Myers will experience a 50% salary reduction to $212,000.
To help alleviate the impact on their income, both executives will be eligible to participate in a contingent bonus plan. This plan allows them to receive back the deducted portion of their salary, plus an additional 20% of the reduction amount, three months after filing a New Drug Application for CTx-1301—an attention-deficit/hyperactivity disorder treatment—with the U.S. Food and Drug Administration.
As part of the cost-cutting effort, Cingulate has already reduced employee base salaries by 5% to 55% and is reviewing its essential vendors. Additionally, several unnamed employees have recently resigned or retired from the company. Non-management board members have agreed to defer their board fees temporarily.
However, due to the need for additional guidance from the FDA regarding changes in timing, structure, and cost, Cingulate has decided to postpone its clinical trial plans for CTx-1301.