- Cancer biotech Black Diamond Therapeutics said it plans to reduce its workforce by about 30%, becoming the latest in a growing list of young drugmakers that are restructuring to save cash amid a sector-wide downturn.
- Black Diamond announced the job cuts alongside plans to scrap what was once its top drug, a prospective lung cancer medicine, because of the “rapid evolution of the treatment landscape.” That drug, BDTX-189, was expected to start Phase 2 testing this year, but the biotech put those plans on hold in January.
- The company now plans to put its resources into two other targeted cancer treatments. The more advanced of the two is being developed for certain brain and lung tumors and began Phase 1 testing in the first quarter. Its first data readout could come next year.
The public market downturn has led dozens of biotech companies to conserve cash. About 40 companies have restructured since last fall, with reasons ranging from clinical and regulatory setbacks to macro-economic forces that have made it harder to raise money on Wall Street.
Overlapping drug pipelines are an issue among emerging drugmakers as well. For example, Black Diamond raised $201 million in an initial public offering in January 2020 largely on the potential of BDTX-189. However, that drug was one of several in development that target DNA insertions in the so-called exon 20 region of a gene called EGFR. Black Diamond’s drug was behind many of them.
The biotech had been aiming to prove its drug could stand out from its competitors, but over time that became more difficult as rivals quickly advanced. Within months of each other, Johnson & Johnson and Takeda each won approvals last year of similar drugs that target exon 20 insertion mutations.
Cullinan Management, a drugmaker that went public in 2021, followed with encouraging data from its own program, as did another small biotech called Dizal Pharma. Blueprint Medicines also has jumped into the crowded field, adding to competition for a market that only includes about 3,000 patients in the U.S., according to a recent note from Stifel analyst Bradley Canino.
Black Diamond responded by delaying plans to start a Phase 2 trial in January and now is giving up on BDTX-189 altogether. The company is moving forward with two other drugs and a smaller workforce. The restructuring lengthens Black Diamond’s cash runway until late 2024, by which time the company may have early clinical results from at least one of those programs.
"The actions announced today enable us to focus and strengthen our organizational priorities, reduce our operating expenses, and continue to invest in value generating clinical development activities to bring us to the next inflection points," CEO David Epstein said in a statement.
The company had 88 full-time employees at the beginning of March, according to a regulatory filing.