Hepion Pharmaceuticals is initiating a restructuring plan aimed at preserving capital, starting with cutting operating costs by about 60%, the clinical stage biopharmaceutical company announced Dec. 7. 

In addition, Edison-based Hepion said CEO and Director Robert Foster resigned from his positions for personal reasons, effective immediately. Chief Financial Officer John Cavan has been appointed interim CEO. 

Hepion is also exploring options such as an acquisition, merger, reverse merger, other business combination, sale of assets and licensing. 

Because of the restructuring, Hepion will incur a one-time charge of approximately $400,000 to $800,000 that will be recorded in the fourth quarter of 2023. 

Hepion developed an artificial intelligence-based, drug-development platform to help researchers better understand conditions such as non-alcoholic steatohepatitis (NASH), fibrotic diseases, hepatocellular carcinoma and other chronic liver diseases. The company said this proprietary deep-machine learning can shorten development times and magnify the differences between placebo and treatment groups.  

The company said 131 patients are enrolled in a Phase 2b clinical trial for its lead drug candidate, rencofilstat, which “has been shown to reduce liver fibrosis and hepatocellular carcinoma tumor burden in experimental disease models.” Hepion intends to continue the trial “and will add additional patients once the clinical trial is fully funded or a strategic transaction has been entered into.” 

In a statement, board Chairman Gary Jacob thanked Foster for his work to advance the development of rencofilstat. 

Foster added, “We put our hearts and souls into bringing rencofilstat into the ongoing Phase 2b clinical trials in NASH, and I wish the very best for the continued successes of the Company’s development program.”  

With the announced changes, the company expects its current cash, cash equivalents and investments will be sufficient to fund operations into the second quarter of 2025. 

In its third quarter 2023 report, filed Nov. 20, Hepion said it had $19.3 million in cash, an accumulated deficit of $213.6 million, and working capital of $14.9 million, as of Sept. 30, 2023.  

“We have not generated revenue to date and have incurred substantial losses and negative cash flows from operations since our inception,” the company said in its filing. “We expect to continue to incur losses for the next several years as we expand our research, development and clinical trials of rencofilstat. We are unable to predict the extent of any future losses or when we will become profitable, if at all.” 

In October 2022, Hepion was one of 24 early-stage technology and biotechnology companies approved for the New Jersey Economic Development Authority’s Net Operating Loss Program, which allows participants to sell their New Jersey net operating losses and unused R&D tax credits to corporations for cash. 

Formerly ContraVir Pharmaceuticals, Hepion was spun off from Synergy Pharmaceuticals in 2014, according to its website.