DermTech announces restructuring, will lay off roughly 15% of workforce

DermTech announced restructuring actions that are intended to prioritize the significant growth opportunities for the DermTech Melanoma Test, streamline operations, suspend pipeline programs and significantly reduce overall operating expenses. Following a detailed review of its growth opportunities and operations, DermTech is focusing substantially all of its resources on growing reimbursed DMT billable samples and expanding payer coverage. All pipeline programs will be suspended. These restructuring actions will primarily include sales, marketing and G&A functions and will result in a workforce reduction of approximately 40 employees, or approximately 15 percent of DermTech’s workforce. DermTech forecasts annualized savings of between $25 million and $30 million upon completion of the restructuring plan. The Company anticipates a one-time restructuring charge of approximately $2 million in the second quarter of 2023. “After a rigorous assessment of our entire business, we’ve made the tough decision to realign our organizational footprint and capital deployment,” said Bret Christensen, CEO, DermTech. “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. By focusing on our mission and taking these steps today, we’re better positioned to lead the genomic revolution in dermatology.” DermTech had cash, cash equivalents, restricted cash and short-term marketable securities of $108.4 million as of March 31, 2023. The Company believes it will have sufficient cash resources to fund its planned operations into the first quarter of 2025.