Migraine therapy maker Impel Pharmaceuticals, psychedelics-focused Cybin and cancer and immuno-inflammatory-orientated EQRx are the latest biotechs handing out pink slips to employees as the flood of layoffs continues in the industry.
In all three cases, the biotechs limited the percentage of their workforce they were letting go to the mid-teens. Impel is reducing its head count by 16% to save cash, with R&D bearing the brunt. Chief Medical Officer Stephen Shrewsbury, M.D., is heading out the door and will depart at the end of March.
The R&D changes come at the expense of NP105, a nasal spray of the antipsychotic olanzapine that was undergoing a phase 2 trial to treat acute agitation in adolescents with autism spectrum disorder. Instead, the company is going all-in on boosting uptake for its nasal spray Trudhesa, which was FDA-approved in 2021 for migraine. This strategy was hinted at back in June 2022, when the company expanded its sales force from 60 to 90 employees to ride the Trudhesa wave.
Even with today’s changes and “other strategic measures,” it doesn’t sound like a long-term solution. In fact, the biotech said it will have sufficient capital only to fund operations into the third quarter of this year. At the end of last September, Impel had $79.7 million on hand in cash and equivalents but is yet to announce its fourth-quarter earnings.
“Today’s announcement is part of a measured effort aimed at best positioning Impel to achieve its business objectives by streamlining clinical development expenses in order to focus resources on maximizing the growing commercial potential of Trudhesa,” CEO Adrian Adams said in a post-market release Wednesday. “I must emphasize that this decision was not taken lightly.”
For Cybin, a 15% reduction in head count is one of the ways the biotech hopes to claw back “millions of dollars” from its annual cash burn rate. The staff, who were let go yesterday, held roles “that were not of a clinical priority or were not directly involved with any of the company’s clinical trial initiatives,” according to a post-market release Wednesday.
“The company has made the prudent decision to evaluate every role within its workforce, including whether certain tasks could be performed more efficiently while ensuring that the company’s core clinical activities continue to be robustly supported and resourced,” CEO Doug Drysdale said in the release. “We are committed to maintaining a lean organization and will continue to make clinical trial execution in support of our proprietary molecules our top priority.”
The announcement comes a week ahead of Cybin giving an update on its pipeline of differentiated psychedelic-based therapeutics. These include CYB003, a deuterated psilocybin analog in a phase 1/2a study for major depressive disorder, and CYB004, also known as deuterated dimethyltryptamine, in phase 1 for generalized anxiety disorder.
Cash looks tight at Toronto-based Cybin, which had just 20 million Canadian dollars ($14.7 million) in the bank as of last week, although the company has also announced an equity program to give it access to more funds.
EQRx’s reasons for reducing its head count by 18% were more generic. The restructuring plan, which will see the company’s workforce drop to around 300 employees by the end of March, should claw back $18 million in annual savings, EQRx said in its earnings report and a related Securities and Exchange Commission filing today.
The news from the three biotechs comes as Jounce Therapeutics announced it was letting go of over half its staff ahead of a merger with Redx.