Microbiome drug developer Finch Therapeutics will lay off 95% of its workforce and end an important clinical trial of a medicine it’s developing for a type of bacterial infection.
The jobs cuts, announced by Finch Tuesday, will affect 77 employees. It is the third round of layoffs for the struggling biotechnology company since April 2022, following prior reductions of 20% and 37%.
In its statement, Finch attributed the restructuring in part to its chances of obtaining additional funding or partnerships to advance the medicine, known as CP-101 and for recurrent C. difficile infections. The company also cited slower-than-expected enrollment in a Phase 3 study of CP-101, unauthorized use of the company’s patents and “broader sector trends.”
“These were very difficult decisions that we determined were necessary after carefully considering a number of factors and challenges facing Finch,” said Finch CEO Mark Smith in the Jan. 24 statement.
Moving forward, Finch plans to focus on “realizing the value” of its intellectual patent estate around CP-101 and microbiome-based therapies, suggesting the company will explore selling assets or other alternatives.
Formed in 2014, Finch Therapeutics later merged with a company called Crestovo, gaining CP-101 and related patents. In 2021, the combined company went public via an initial public offering of shares at $17 apiece, raising $128 million in gross proceeds.
Shares now trade at $0.55 following a yearslong slide in value that’s corresponded to setbacks for the company and in the broader field of microbiome drug development. More recently, Finch lost its partner Takeda Pharmaceutical, which in August handed back rights to two preclinical medicines for Crohn’s disease and ulcerative colitis.
Takeda’s decision prompted Finch’s second restructuring in September. But the biotech was still moving forward with CP-101, resuming patient dosing in the Phase 3 study after a clinical hold by the Food and Drug Administration had led it to pause enrollment.
Set to involve more than 300 participants, the study was designed to compare CP-101 against a placebo in preventing recurrent C. difficile infections. Finch expected to deliver data by the first half of 2024, potentially helping to support an FDA approval application.
But since Finch’s September restructuring, rival Ferring Pharmaceuticals won FDA clearance for a microbiota-based therapy for recurrent C. difficile infections. Seres Therapeutics, another competitor, has an oral pill composed of purified bacterial spores that in October was accepted for regulatory review, with a decision expected by the end of April.