Crescita Therapeutics Announces Measures in Response to COVID-19 Virus
2020-03-24 19:23 ET - News Release
LAVAL, QC, March 24, 2020 /PRNewswire/ - Crescita Therapeutics Inc. ( TSX: CTX) ( OTC US: CRRTF ) (« Crescita » or the « Company »), a growth-oriented, innovation-driven Canadian commercial dermatology company with in-house research & development (« R&D ») and manufacturing capabilities, today announced measures it is taking in response to the novel coronavirus pandemic (« COVID-19 »).
In accordance with the government-mandated shut-down of all non-essential businesses announced by Québec Premier François Legault yesterday, the Company will be temporarily closing its office and production facility in Laval, Québec, effective today at midnight until at least April 13, 2020. The facility closure will regretfully result in temporary layoffs affecting most production and office personnel. Certain employees deemed critical to maintaining basic services during the shut-down, including customer service, will be working remotely with reduced hours. Product distribution through the Company’s third-party logistics provider will remain operational with reduced capacity.
Business Impact to Date
Most of the Company’s Canadian clients in the aesthetic and medical aesthetic markets have temporarily closed resulting in substantially decreased Canadian product sales. The Company’s international business with various affected countries such as Malaysia, South Korea and China has also decreased. The Company anticipates that royalties from international sales of its products will be adversely affected by lower demand and may also be affected by border restrictions.
The Company is in the process of implementing various initiatives in order to conserve cash and help maintain its financial flexibility through the uncertainties and economic pressures posed by the pandemic. The members of the executive team, including the CEO and CFO, as well as members of the Company’s Board of Directors have agreed to temporary base salary or fee reductions ranging between 25% and 40%. In addition, effective March 24, 2020, the Company terminated its Automatic Share Purchase Plan (« ASPP ») which was launched on June 28, 2019 in connection with the Company’s current normal course issuer bid (« NCIB »). The current NCIB remains in effect on the same terms and conditions as previously disclosed. As of December 31, 2019, the Company had cash and cash equivalents of $9.3 million.
The Company is closely monitoring developments and will continue to provide updates as the COVID-19 situation evolves.