- Inovio said Tuesday it will cut 18% of its workforce and 86% of its contractors as the company looks to reduce expenses after high-profile challenges in its efforts to produce a COVID-19 vaccine.
- The layoffs, affecting about 55 full-time employees, will be combined with other cost-saving initiatives designed to reduce operating expenses by about 30% over the next 18 months. The Pennsylvania biotech said the steps will extend its cash runway into the third quarter of 2024.
- CEO Jacqueline Shea said the reorganization will help Inovio focus on its lead programs, which include the COVID-19 vaccine and a medicine to treat HPV-associated precancerous cervical dysplasia. The company also has a number of other therapies in its pipeline for infectious diseases and cancer.
Inovio’s share price soared in the spring and summer of 2020 as the company leaped into development of a coronavirus vaccine. But Inovio lacked the backing of a major pharmaceutical partner and faced several stumbles in research and testing.
The Food and Drug Administration placed a partial clinical hold on the vaccine in September 2020, citing questions about Inovio’s planned trial and its delivery device. The vaccine, known as INO-4800, is DNA-based and is delivered into cells via an electrical pulse.
Inovio and partner Advaccine finally secured clearance to begin a Phase 3 trial in the U.S. in November 2021, but by that point they were already far behind would-be competitors like Pfizer, Moderna and Johnson & Johnson. In May 2022, Inovio said it would discontinue that trial and instead focus on developing its candidate as a booster shot. The company also replaced longtime CEO Joseph Kim with Shea.
Shares of Inovio have dropped 77% in the last 12 months. The stock, which traded at $2.24 early Wednesday, topped $30 in June 2020.
Inovio is not alone in reducing its workforce in recent months. Fifty-four biotech companies announced layoffs in the first half of 2022, compared to only one in the first half of 2021 and 12 in the second half of 2021, according to the trade group BIO. Just this month Adverum, CytomX and Pact Pharma all said they would cut staff, too.