NEW YORK – DermTech announced after the close of market Wednesday that it is taking additional restructuring actions related to focusing its resources on growing billable samples of its DermTech Melanoma Test and to expanding payor coverage.
The San Diego-based company said that it plans to dedicate "substantially all of its resources" to those two tasks, which will include a further reduction of 30 employees, or approximately 15 percent of the company's workforce.
The company said that it expects these actions, aimed at prioritizing revenue growth, streamlining operations, and reducing overall operating expenses will result in approximately $40 million in total operating expense reductions compared to fiscal 2022, when combined with its initial restructuring plan announced in June of last year. At that time, the company laid off 40 employees and anticipated savings of between $25 million and $30 million annually.
DermTech also expects to see a one-time restructuring charge of approximately $1.3 million in the first quarter of this year.
In November, the company said that revenues for its third quarter rose 8 percent year over year to $3.9 million from $3.6 million. It exited Q3 2023 with $37.2 million in cash and cash equivalents and $31.0 million in short-term marketable securities.
"Growing revenue remains our primary objective, and we began to see meaningful improvement in many of our top-line and operating metrics during the third quarter of 2023," DermTech CEO Bret Christensen said in a statement. "Our realigned commercial tactics and focus on reimbursed tests has yielded improvement in nearly all of our key performance indicators. We must continue to refine our approach as we learn more and be determined to achieve these goals with a lean organization and by aligning behind only the highest ROI opportunities."