Three biotechnology companies developing new forms of cancer cell therapies are starting the new year with major cuts to staff and research, a possible sign of a longer research road than they or their investors had been expecting.
In a statement Thursday, Fate Therapeutics said a partnership with Johnson & Johnson would end after it declined a proposal from the larger company to continue their collaboration on “revised terms and conditions.” As a result, Fate will wind down joint activities in the first quarter 2023.
The San Diego-based company will also restructure its operations more broadly, revealing that it’s halting development of four clinical-stage candidates that use natural killer, or NK cells, in favor of several earlier-stage projects.
Fate will reduce its headcount to 220 employees, less than half the 449 it most recently reported as employing at the end of 2021. With the lower expenditures and around $475 million in cash at the end of 2022, Fate expects to be able to fund operations until the end of 2025.
Shares in the company fell by more than 60% in Friday morning trading, erasing hundreds of millions of dollars in market value.
Separately, Century Therapeutics on Thursday said it will cut its workforce by around 25% and de-prioritize investment in an experimental treatment for glioblastoma and discovery research in blood cancers. The company, which had 170 employees at the end of 2021, will also close its labs in Seattle and Hamilton, Ontario and consolidate operations in Philadelphia.
Century’s head of research and development, Hy Levitsky, has resigned as well.
Also on Thursday, TCR2 Therapeutics said it will lay off 25% of its staff and narrow the focus of an ongoing clinical trial while it works on “second-generation” T cell therapies.
All three companies are part of a wave of biotechs aiming to improve on the first cancer cell therapies brought to market by Novartis, Gilead, Bristol Myers Squibb and Johnson & Johnson. While their techniques differ, they hope to develop cell treatments that are more convenient, more potent, or capable of working in different cancer types, such as in solid tumors.
Fate and Century, for instance, both use induced pluripotent stem cells as the basis of their treatments, allowing for “allogeneic,” or off-the-shelf, treatment. Both are also experimenting with using NK cells, rather than T cells.
But they and others in the field along with them are running into technical challenges, as well as increased competition from a class of drugs known as bispecific antibodies. These medicines latch onto both immune cells and cancer cells and are emerging as an alternative to CAR-T cell therapies for certain cancers like lymphoma.
Roche’s Lunsumio became the first bispecific of its kind approved for a type of lymphoma last year, and potential competitors are in the works from AbbVie, Regeneron, J&J, Pfizer and Bristol Myers.
Geulah Livshits, an analyst with Chardan Research, wrote in a note to clients Friday that the job cuts at Fate and Century suggest that allogeneic therapies might be losing some of their allure.
“We now appear to be approaching a low point in the NK cell hype cycle (and perhaps the hype cycle for allo[geneic] cells in general),” Livshits wrote. With bispecifics “showing improving activity profiles” and drugmakers adapting to the logistics of personalized CAR-T treatments, the next phase for allogeneic cell therapies depends on capitalizing the “engineerability” of the cells “to develop differentiated multifunctional assets with advantages beyond an off-the-shelf availability.”