One could be forgiven if they expected Exicure to have stopped the bleeding after a tumultuous first quarter of 2022. It was then that two top executives, including the CEO, resigned and three board members departed.
As it turns out, the preclinical crack that preceded the initial exodus has only continued to wreak havoc on the company’s financial future. After shaving half of its staff in January, the company is at it again, cutting 66% of its remaining workforce, according to a release Tuesday. All R&D work, including partnered programs, has been shelved, and the company is looking to offload its preclinical programs, irrespective of how weak they appear.
To keep its head above water, Exicure is selling $5.4 million in shares to its existing investor, CBI USA, giving the latter more than 50% of voting power in the company. In the release, Exicure CEO Matthias Schroff said the decision to let people go was in “no way a reflection on them.” Exicure says its executive team is “expected” to stay on following the downsizing and restructuring.
Likely contributing to the decision to press pause on all R&D work were new data disclosed by the company showing that its top preclinical asset, SCN9A, flunked in vivo studies in nonhuman primates. Exicure says the med “did not meet desired target engagement levels as observed in previous in vitro preclinical studies” and, as a result, would require additional preclinical work that it can’t take on.
It’s more of the same for Exicure, which for almost a full year now has tried to stave off the collapse of the company and its pipeline. But data trump all in biotech, as the company has brutally learned.
On the Nasdaq, Exicure was living off of the public market sugar high that guided much of the biotech space in 2020 and early 2021. In fact, the company was able to extend the ride longer than many, until November 2021 when Exicure disclosed that a former senior researcher confessed to “alleged improprieties” regarding its XCUR-FXN preclinical program for patients with Friedreich’s ataxia. The share price plummeted on the news, falling nearly $9 the day after the disclosure, from some $32 per share to around $23.
After more details came to light, Exicure ended development of the program and announced it would cut half of its staff by January 2022. The company explained that it would redirect its focus toward the SCN9A assets and other partnered-programs.
Exicure had two collaborations in the works that will now be shelved: one with Ipsen to develop treatments for Huntington’s disease and Angelman syndrome, and another with AbbVie to find treatments for hair loss. Both were based on Exicure’s nucleic acid tech, dubbed “spherical nucleic acid,” which it has touted as being able to more efficiently enter a swath of cell types than competitor nucleic acid-based treatments.
As of the end of June, Exicure had just over $23 million left in cash and short-term investments, estimating that was enough to last at least six more months. The company was bleeding money, however, having spent more than half of the reserves it had available entering 2022.