Biotech Athersys to lay off 70% of its staff in an effort to cut costs
- Athersys, a biotech company working on a type of stem cell therapy, is to lay off 70% of its workforce, announcing Thursday a restructuring plan aimed at reducing costs.
- The move comes two weeks after Athersys revealed a late-stage study of its lead drug led by partner Healios KK. missed its main objective in the treatment of ischemic stroke. The company’s shares fell more than 60% on the day the news broke.
- Athersys expects to complete its restructuring by the end of June. Even with the spending cuts, the company said it will need to raise funds in the future and hinted at exploring other options.
Overview of the dive:
Athersys’ research efforts center on a cell therapy platform that it studies in a range of conditions, including stroke, respiratory distress and heart attack.
In the area of stroke, Athersys is working with Japan’s Healios, which has tested Athersys cell therapy as a stroke treatment in a phase 2/3 trial called TREASURE. The placebo-controlled study was conducted in Japan and recruited 206 older adults with moderate to moderate-severe ischemic stroke.
Results showed that treatment with Athersys therapy did not significantly outperform placebo on the primary study endpoint, which was defined as achieving an “excellent outcome” out of three function measures at 90 days.
Although the trial results were insufficient, Athersys executives said in a June 2 conference call that they and Healios would continue to analyze the study results.
The company said in its statement that its restructuring plan is intended as a first step to make it “more attractive for both financial and strategic partners”.
Athersys employed 104 people as of December 31, 2021. The restructuring plan will cost the company about $3.5 million in severance costs.
Along with the job cuts, several senior members of the management team are also leaving. Athersys president and chief operating officer William Lehmann left the company on May 31. Executive Vice President and Chief Scientific Officer John Harrington and Chief Financial Officer Ivor Macleod will step down at the end of June.
Athersys CEO Daniel Camardo said on the conference call that the departures are not in response to the decline in the company’s shares, which have been trading at less than $1 per share since February.
Going forward, Athersys will focus on its MASTERS-2 trial, which is taking place in the Asia-Pacific region, Europe and the United States. The company, however, said it will need to raise more funds to fully enroll in the study and report the results. .