The 2021 NASH disaster at Metacrine has extended into 2022. The company has fired half its staff and ended work on a preclinical asset intended for the fatty liver disease.
The San Diego biotech laid off most of its research team and ditched work on a hydroxysteroid dehydrogenase program before it even made it into the clinic. The company had 35 full-time employees as of Sept. 30, 2021, according to Metacrine’s latest quarterly earnings.
The mass clearing is meant to refine Metacrine’s focus on a phase 2 trial in inflammatory bowel disease, specifically ulcerative colitis, that is slated to start in the first half of this year after snagging FDA clearance, the biotech said Friday.
At the heart of that trial, though, is a drug that failed last October in patients with NASH, or non-alcoholic steatohepatitis. The asset, MET642, didn’t have a dose-dependent response in a small phase 2a study of 60 patients, Metacrine said in October.
That news more than halved the company’s at the time, pushing its share price down to $1.64 apiece. Metacrine has continued sinking since then, sitting at 46 cents per share Friday afternoon, although the layoff news appeared to have no impact on investors’ wallets.
CEO Preston Klassen, M.D., tried reassuring investors about the company’s narrowed focus by talking up the science behind MET642, a farnesoid X receptor, or FXR, an agonist.
“FXR is highly expressed by intestinal epithelial cells and plays a key role in healthy intestinal function by maintaining the epithelial barrier, reducing bacterial translocation into the intestinal wall and regulating the innate immune response. FXR therapy could bring an oral, once-daily, well-tolerated and non-immunosuppressive medicine to patients,” Klassen said in the statement.
The CEO is also wearing the chief medical officer hat after Hubert Chen, M.D., resigned Dec. 31, 2021, to take another job. A spokesperson confirmed the company has not hired Chen’s replacement yet. General Counsel Catherine Lee, also an executive vice president, resigned Jan. 28, as well, according to a Securities and Exchange Commission filing.
Most of the restructuring including layoffs have already happened, Metacrine disclosed in an SEC filing. The moves will give Metacrine enough cash to last through 2023, the company said, noting it had $76.4 million in cash as of Dec. 21, 2021.
Metacrine is far from the only biotech to reduce staff in recent weeks due to failed programs. Once a high-valued biotechs, Biosplice fell back down to Earth this week and laid off 41 workers. Unity Biotechnology let go of half its staff on Feb. 3 to focus on ophthalmology assets.