Hoping to fund operations for another three years, Nektar Therapeutics will cut approximately 83 workers from its payroll and search for a partner for one of its two experimental drugs currently in clinical testing, the company said Monday.
The 60% reduction in headcount at the company’s San Francisco offices will reduce the number of employees there to 55. Workers at a Huntsville, Alabama manufacturing facility will be unaffected.
The layoffs come about a year after the California-based company announced a big round of job cuts following the failure of its lead cancer drug project and subsequent cancellation of a partnership with Bristol Myers Squibb. With the layoffs announced Monday, Nektar will have trimmed its employee rolls by more than 80% since April 2022.
Nektar’s job cuts come amid a broader contraction among biotech companies that has seen more than 3,000 workers lose their jobs in the first three months of 2023. Development-stage biotechs are dependent on a steady flow of funding to sustain operations, but share offerings have dried up as investors have soured on the sector.
Following the layoffs, Nektar said it will focus on development of an experimental eczema drug called rezpegaldesleukin, or rezpeg, in partnership with Eli Lilly. It will also continue work on a cancer project called NKTR-255, but will seek a “strategic development partner.” NKTR-255 is in clinical trials in combination with approved drugs like Merck KGaA’s Bavencio and Johnson & Johnson’s Darzalex.
With the layoffs, Nektar estimates it has enough money to last through the middle of 2026. As of March 31, the company held around $456 million in cash and equivalents.
Nektar also announced that CFO Jillian Thomsen has stepped down from her post, to be replaced on an interim basis by Sandra Gardiner, a partner in FLG Partners. Thomsen will leave Nektar in June.
With Bristol Myers, Nektar had been developing a closely watched drug called bempegaldesleukin in combination with the bigger drugmaker’s immunotherapy Opdivo in melanoma. Bristol Myers had paid Nektar nearly $2 billion up front for rights to the drug, but the failure of a Phase 3 trial prompted Bristol Myers to pull out.
After Nektar’s initial round of layoffs, it was linked to a possible acquisition or major investment by British development company PureTech Health, although those talks ended without a deal.