It’s been a torrid few weeks for pressured OncoMed with trial woes compounded by partners walking away. Now, after hinting at cuts earlier this month, the biotech will shed 50% of its workforce.
This comes after a double dose of bad news in April, hitting first when it revealed that its Celgene-partnered lead asset demcizumab had flunked a phase 2 pancreatic cancer trial and Bayer stepped away from two drugs, triggering a 40% drop in its stock price.
Then last week, its shares tumbled again as a phase 2 trial for tarextumab (its anti-Notch2/3 med), in combination with etoposide and chemo in first-line patients with small cell lung cancer, missed its primary endpoint of progression-free survival, as well as its secondary endpoints of overall survival and a failure to see biomarkers showing a Notch pathway gene activation.
As of last night, its market cap was just under $140 million and its share price $3.72 afterhours; compare this to the first week in March, when it was over $10 a share.
The cuts are deisgned to save costs: $60 million, to be exact, over the next two years, which should see it through to the end of the decade in cash terms. The ax comes down swiftly, with the cull set to be completed by the end of Q2.
There are strategy changes on the R&D side, too, as it now intends to “focus internal efforts on the advancement of three clinical-stage programs to key milestones and continued immuno-oncology drug discovery and development, while seeking to partner select pipeline assets,” according to its update.
The biotech says it has also “aligned internal resources” with an eye to boosting the likelihood of getting more cash via milestone payments, including those with Celgene for early-stage work on rosmantuzumab, navicixizumab and OMP-313M32, which could be worth nearly $100 million over the next two years.
It says it will also seek to “maximize the value from potential interest in partnering the assets to which it has worldwide rights, such as vantictumab, ipafricept, GITRL-Fc trimer and undisclosed immuno-oncology discoveries.”
Paul Hastings, OncoMed’s chairman and CEO, said: “With this restructuring, we expect to have greater than two years’ cash to support operations focused on driving our rosmantuzumab, navicixizumab and anti-TIGIT clinical-stage programs to $98 million in potential development milestone payments while advancing our immuno-oncology discovery-stage portfolio. We plan to also explore partnering opportunities for our Wnt pathway and immuno-oncology agents to which we have worldwide rights.”
Another struggling ‘O’ biotech, Ophthotech, has also announced some changes at the top after cutting 80% of its workforce earlier this year. This came after two pivotal late-stage failures for its experimental eye drug Fovista (pegpleranib) when used with Novartis’ marketed eye med Lucentis (ranibizumab).
The biotech’s co-founder and CEO David Guyer, M.D., is out as chief but becomes an executive chairman from July. Glenn Sblendorio, its president and CFO, becomes its new CEO when Guyer steps down.
By Ben Adams
Source: Fierce Biotech
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