- Homology Medicines, a biotechnology company developing genetic medicines for rare diseases, will lay off scores of its employees and stop research in a reset meant to position the company for a sale, merger or other business combination.
- The layoffs will reduce Homology’s workforce by 87%, the company said in a statement Thursday, and enable it to continue to operate into 2026. Homology employed 92 full-time staff as of the end of last year.
- Homology on Thursday also announced initial data from three people who received its gene therapy for the rare disease PKU, or phenylketonuria, in an early-stage clinical trial. While the company described the results as promising, it cited the current “tough financing environment” and the therapy’s likely long development timeline in its decision to restructure.
Homology’s fresh data, which show signs of its treatment working, wasn’t enough to forestall a change of direction.
Founded in 2015, Homology has worked away at developing a genetic medicine for PKU, a serious disease in which the body can’t properly metabolize the amino acid phenylalanine. The resulting buildup, if untreated, can cause progressively worse neurological damage. Avoiding foods high in phenylalanine, like meat and dairy, can help, as can treatment that replaces the enzyme needed to break the amino acid down.
Homology’s initial project involved a gene therapy that delivers into liver cells the code for the missing enzyme. But the Food and Drug Administration put the program on hold in 2022, citing warning signs of liver risks, and Homology later switched gears to a successor gene-editing treatment.
Different than the first, this second medicine was designed to correct the gene encoding the enzyme via a form of gene editing that doesn’t involve DNA cutting. The data disclosed Thursday showed treatment led to reductions in phenylalanine levels in two of three treated patients. There were no serious safety events reported and, with preventive immunosuppression, liver function tests were normal.
But phenylalanine levels were variable in the second patient and rose in the third, who was more recently dosed.
“Pitfalls of rare disease [and] gene therapy clinical trials of late have been the small 'n' that rarely generates unequivocal output that, compounded with today's challenging market conditions, have fueled investor skepticism,” wrote Dae Gon Ha, an analyst at Stifel, in a Thursday note to clients.
Albert Seymour, Homology’s CEO, cited those challenging conditions in explaining Homology’s decision to stop its research. “We believe the best path forward for our shareholders is to evaluate all strategic options for the company and our pipeline,” he said in the company’s statement.
Homology held about $150 million in cash, cash equivalents and marketable securities at the end of March. The company plans to give an update on the process, which it said could lead to an acquisition or sale of its assets, alongside its second quarter earnings.
The company raised $144 million in an initial public offering in 2018, but shares have since lost more than 90% of their value.