Shares of DermTech (NASDAQ: DMTK) surged in pre-market trading at the time of publishing on Thursday after the precision dermatology company announced a restructuring program. As a part of these restructuring actions, the company will suspend all pipeline programs, and focus all its resources on increasing billable samples of DermTech Melanoma Test (DMT) and expanding payer coverage.
As a result of this restructuring, the company will layoff around 40 employees, or 15% of DermTech’s workforce. The company anticipates annualized savings between $25 million and $30 million as a result of this restructuring and a one-time restructuring charge of around $2 million in the second quarter of this year.
Bret Christensen, CEO, DermTech commented, “After a rigorous assessment of our entire business, we’ve made the tough decision to realign our organizational footprint and capital deployment. We are changing certain tactics to prioritize reimbursed tests and drive revenue growth, which capitalizes on our 40 percent increase in covered lives to approximately 126 million since the end of 2022. We have a great opportunity to integrate the DMT into the melanoma care pathway to improve patient outcomes. “
As of March 31, DermTech had cash and cash equivalents of $108.4 million and “believes it will have sufficient cash resources to fund its planned operations into the first quarter of 2025.”
DMTK stock has gone up by more than 20% year-to-date.
