- Athersys, a biotechnology company working on a type of stem cell therapy, will lay off 70% of its workforce, announcing Thursday a restructuring plan aimed at cutting costs.
- The move comes two weeks after Athersys revealed a late-stage study of its lead drug run by partner Healios K.K. missed its main goal in treating ischemic stroke. Shares of the company fell by more than 60% the day the news was disclosed.
- Athersys expects to complete its restructuring by the end of June. Even with the reduction in expenses, the company said it will need to raise cash in the future and hinted at exploring other options.
Athersys’s research efforts are centered around a cell therapy platform it has been studying across a range of conditions, including stroke, respiratory distress and heart attack.
In stroke, Athersys is working with Japan’s Healios, which 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 enrolled 206 older adults with moderate to moderate-severe ischemic stroke.
Results showed treatment with Athersys’ therapy did not significantly outperform a placebo on the study’s main goal, which was defined as reaching an “excellent outcome” on three measures of function at 90 days.
While the trial results fell short, Athersys executives said on a June 2 conference call that they and Healios will continue to analyze the results from the study.
The company said in its statement that its restructuring plan is intended as a first step to make it “more attractive to both financial and strategic partners."
Athersys employed 104 individuals as of Dec. 31, 2021. The restructuring plan will cost the company approximately $3.5 million in termination-related expenses.
Along with employee cuts, several senior members of the executive team are departing as well. 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 the departures are not in response to the decline in the company’s stock, which has traded below $1 a share since February.
Moving forward, Athersys will focus on its MASTERS-2 trial, which is being run in the Asia-Pacific region, Europe and the U.S. The company said, however, that it will need to raise more cash to fully enroll the study and report results.