Third quarter earning reports have brought news of layoffs from at least six biotechnology companies this week as a weak market continues to weigh on smaller drugmakers.
Through Wednesday, Tricida, Freeline Therapeutics, Harpoon Therapeutics, Adamis Pharmaceuticals, Neoleukin Therapeutics and NexImmune have all announced workforce reductions. The cuts range from 30% of employees at NexImmune to 57% of staff at Tricida, putting scores of workers out of a job.
It’s a calculus that many biotech companies have had to make this year. Smaller drug companies have struggled to tap funding that, until late last year, was readily available. Private biotechs are putting off or canceling plans to go public due to lukewarm investor demand, while those already publicly traded are suffering from lower stock prices that make secondary offerings less attractive.
The six companies that announced layoffs this week join a growing list of biotechs that have been forced at cut staff this year. At the end of June, at least 54 companies had reported workforce reductions, according to the trade group BIO.
While market conditions are affecting all companies to some degree, others face additional difficulties. For Tricida, the failure of its principal drug in a major study has been a turning point. Late last month, results from the trial showed Tricida’s drug, called veverimer, did not meet its goal in slowing the progression of chronic kidney disease. Soon afterwards, the company announced a strategic review to “maximize stakeholder value.”
That review has now led to Tricida’s decision to cut its workforce by 57%. It’s not clear exactly how many employees are affected. The company employed 57 staff full time as of Dec. 31 last year.
While Hutchmed and NightHawk did not announce layoffs, the companies are both trimming their research pipelines. Hutchmed said it will focus resources on its late-stage trials, deprioritizing other early-stage research and considering some for out-licensing. NightHawk is discontinuing its cancer drug research, investing instead in biomanufacturing and medical countermeasures.
In the broader life sciences sector, meanwhile, sequencing giant Illumina announced plans to reduce its global workforce by 5%, citing the “current macroeconomic environment."