Infinity Pharmaceuticals is laying off most of its workforce after a planned merger with fellow biotechnology company MEI Pharma fell apart.
The nearly three-decade-old cancer drug developer said Wednesday it’s cutting 21 jobs, or 78% of its employees, and reducing the size of its board from eight members to five. The remaining board members have agreed to stay in their roles without further compensation from the company, Infinity said.
The remaining staff will seek a “strategic transaction” to maximize the value of Infinity’s sole clinical prospect, an immunotherapy named eganelisib that’s being developed as a treatment for head and neck cancer. Infinity has hired investment bank SSG Capital Advisors to lead the search, and may drop an appeal to the Nasdaq stock exchange, which has threatened to delist its stock.
“The company continues to believe, based on the data generated to date, that eganelisib offers a near-term value creation opportunity that would be attractive to potential third-party acquirers,” Infinity said in a statement. It is discussing a Phase 2 trial design with the Food and Drug Administration.
Infinity was hoping for a different outcome. In February, the Massachusetts-based biotech struck a deal to merge with MEI in a deal combining their cancer drug portfolios. The deal would have given the resulting company enough financial backing to survive through mid-2025 — time enough to generate more clinical data.
But the deal was challenged by an activist investor that launched a rival bid and, on Monday, rejected by MEI shareholders. That outcome forced Infinity to cut costs while searching for a new home for eganelisib.
The failed deal attempt is the latest in a series of setbacks for Infinity, which was formed in 1995 and whose research was led for more than a decade by Julian Adams, the medicinal chemist and Millennium Pharmaceuticals veteran known for shepherding along the multiple myeloma drug Velcade.
Infinity aimed to develop small molecule drugs for cancer, only to hit one roadblock after another. Two drugs that showed early promise later failed clinical trials in pancreatic, lung, and stomach cancers. A blood cancer medicine Infinity licensed from another company enticed AbbVie into a lucrative partnership, but the collaboration was short-lived, and Infinity eventually sold it off.
Over that time, Infinity shuttered its drug discovery work. Adams retired from the industry. Its shares, which climbed to nearly $50 apiece in 2013, are worth less than $1. Infinity’s last remaining prospect is eganelisib, which, like the company’s blood cancer drug, originated from a 2010 deal with biotech Intellikline.
In its most recent quarterly earnings report, the company warned it may not remain solvent for another 12 months without further funding. It had about $13 million in cash on hand at the end of March.