Aridis Pharmaceuticals has laid off a fifth of its workforce in the wake of AstraZeneca’s “surprise” move to terminate its pneumonia collaboration over a payment dispute.
As part of their 2021 agreement, Aridis agreed to pay $11 million upfront to AstraZeneca’s MedImmune unit for the rights to the monoclonal antibody suvratoxumab. The deal also gave AstraZeneca an equity stake in Aridis and allowed the Big Pharma first negotiations on future licensing as well as potentially $115 million to follow in milestone payments.
But Aridis revealed last week that AstraZeneca terminated the license agreement “for non-payment of the upfront cash payment which was due on December 31, 2021.” For its part, Aridis said in a Securities and Exchange Commission filing last week that it “does not agree that it is in material breach of the license agreement.”
In return, Aridis has notified MedImmune that it’s in breach of a section of the licensing agreement that ensures the AstraZeneca unit provides access to “know-how” relevant to suvratoxumab, also known as AR-320. Aridis has “requested that the material breach be cured as soon as possible,” it repeated in a Friday evening release.
In the wake of the “sudden, unexpected termination,” Aridis has placed the phase 3 trial of suvratoxumab in ventilator-associated pneumonia on hold. But the hold has “significantly lowered” the company’s operating expenses, leaving it no option but to let go of seven full-time employees. The biotech now has 26 staff still on the books.
“While we seek a remedy to the license dispute, we want to assure our shareholders that we remain steadfastly committed to developing our pipeline products as potential breakthrough therapies to fight antimicrobial resistance,” Aridis CEO Vu Truong, Ph.D., said in Friday’s release.
Trying to stay positive, Aridis pledged to remain focused on developing both AR-301—which is in a phase 3 trial for ventilator-associated pneumonia and has another late-stage trial in the works—and AR-501, which is in a phase 2 study for cystic fibrosis.
To add to the tumult at Aridis, board member Craig Gibbs, Ph.D., also stepped down last week, the company revealed in the same release. Gibbs took up the position of CEO at Asher Biotherapeutics in 2020 and left Aridis’ board to “devote more time and attention to managing” that company, according to Aridis.
Asked by Fierce Biotech to comment last week on the breakdown in relations with Aridis, AstraZeneca reaffirmed that it had terminated the agreement over a “breach of contract.”
“We recognise that there are few treatment options for serious bacterial infections and we are actively investigating opportunities to advance preventative solutions including with the suvratoxumab program,” a spokesperson for the Big Pharma said.