Rafael Holdings is laying off staff and cutting short early-stage R&D efforts that were touted as the company’s main focus less than a year ago, all in the name of saving cash and seeking out other investment, acquisition or in-licensing opportunities.
The New Jersey-based umbrella company continues to invest in drug developer Cornerstone Pharmaceuticals, formerly known as Rafael Pharmaceuticals, a cancer metabolism-based biotech that developed Rafael’s former lead prospect devimistat before running into phase 3 failures last year.
Now, Rafael Holdings’ board has decided to curtail early-stage development efforts altogether, including pre-clinical research at another of its subsidiaries, Barer Institute.
A spokesperson for Rafael told Fierce Biotech that “under 10” employees would be made redundant. Rafael expects to incur severance charges of about $500,000, according to Nov. 9 filings with the Securities and Exchange Commission.
“We would like to acknowledge our R&D colleagues and scientific advisors and thank them for their dedication to our programs,” Rafael Holdings CEO Bill Conkling said in a post-market release Nov. 15. The former Novartis leader holds a track record of bringing oncology drugs to market, joining Rafael last spring, initially as chief commercial and business officer.
Conkling moved to Rafael at the same time as former CEO Ameet Mallik. Then, in late November, both leaders were set to depart following the phase 3 failures of devimistat in pancreatic cancer and acute myeloid leukemia. However, Rafael later had a change of heart, tapping Conkling to helm the biotech in February as Mallik departed.
The clinical failures derailed Rafael’s plans to become a commercial-stage oncology company and prompted other C-suite departures, including Chief Compliance and Ethics Officer Melissa Lozner.
At the time, the remaining execs were tasked with revitalizing Rafael by focusing on its early-stage pipeline. Now, the company will once again pivot in efforts to stay afloat amid biotech’s challenging market.
“We believe that our strong balance sheet affords us the opportunity to focus on strategic business development efforts at a time of substantive dislocation in the biotech sector with the goal of acquiring, in-licensing or investing in later-stage assets with the potential to achieve meaningful clinical milestones, which if successful, could improve the lives of patients and increase value for our shareholders,” Conkling said in the release.
As of July 31, Rafael Holdings had $63.2 million in cash, cash equivalents and marketable securities. The company pulled in an additional $33 million from a real estate sale that included an 800-car parking garage in August.