Sector News

Slow death of Eleven Bio continues as 70% of staff axed

June 24, 2016
Life sciences

Eleven Biotherapeutics, which has valiantly (or stubbornly) carried on over the past 12 months despite a slew of major trial failures, is now, finally, nearing the end.

In a SEC filing (not published on its site) the Cambridge, MA-based nano cap announced it was cutting 14 positions in the company–or 70% of its total remaining staff.

In the 8-K form, the biotech said: “The company will eliminate 14 positions across the organization, representing approximately 70 percent of the company’s workforce [and it] expects the restructuring to be substantially complete in the third quarter of 2016.” There will be a total of $900,000 in restructuring costs, with around $600,000 of that being made up from severance packages.

Eleven Bio said that it is also “continuing to review the potential impact of the restructuring, and is unable to estimate any additional restructuring costs or charges at this time.”

Its shares have taken a battering in recent months. In May of last year, its late-stage drug EBI-005 (isunakinra)–an IL-1 receptor inhibitor–flunked a Phase III study for dry eye disease. Then in January, a follow-up Phase III trial to study the drug’s impact on allergic conjunctivitis also flopped, putting serious strain on the company’s dwindling cash supplies.

Then, in March, it was threatened to be booted off the Nasdaq after falling into penny stock territory and failing to comply with its strict equity rules on trading. It was given 180 days to get its act together.

The Third Rock alumni also announced earlier this month that it was to out-license its second, preclinical IL-6 ocular disease drug EBI-031 in its limited pipeline to Roche ($RHHBY) for some much needed financing.

It got $7.5 million upfront, a promise of another $22.5 million for an FDA acceptance of an IND and up to $240 million in future milestones for global rights to the drug and all related IP around it. But as it had burned through much of its cash by the fourth quarter, the upfront payment clearly came too late for the 14 staffers who will be finding a pink slip in their post.

By Ben Adams

Source: Fierce Biotech

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