Cancer drug developer Rain Oncology has become the latest in a long and growing list of biotechnology companies to lay off staff this year.
Rain on Tuesday announced plans to cut 65% of its workforce and dial back clinical development of its lead drug, a prospective cancer treatment called milademetan. The drug failed a Phase 3 trial last week in a type of fatty tissue cancer. Rain will halt enrollment in an ongoing Phase 2 test as a result, and is terminating a planned trial meant to test milademetan alongside a commonly used cancer immunotherapy.
Rain’s chief medical officer, Richard Bryce, will transition to an advisory role. Robert Doebele, the company's co-founder and chief scientific officer, will take his place.
Rain had 63 full-time employees at the end of last year, according to a regulatory filing. The restructuring is expected to extend the company’s financial runway through the end of 2026.
“I want to sincerely thank every Rain colleague who has been impacted by this realignment. Their contributions have, without a doubt, brought us closer to better understanding the milademetan program, and towards Rain achieving its mission for patients,” said CEO Avanish Vellanki, in a statement.
The news makes Rain at least the 76th biotech company to announce job cuts this year and the ninth this month alone, according to data compiled by BioPharma Dive. Many of those layoffs are the result of a public market downturn that has depressed stock prices and made fundraising more difficult. But some, as in Rain’s case, have been triggered by setbacks in clinical testing.
Rain was one of 104 biotechs to go public in a record 2021, raising $125 million at a time when young drugmakers could quickly start up and pivot to the public markets. The company did so to advance milademetan, a treatment that’s meant to reactivate the tumor-suppressing protein p53 — a long-studied, but difficult cancer target — by inhibiting a molecule that blocks its activity.
Rain has been developing the drug for solid tumors overexpressing that molecule MDM2. It licensed the therapy from Daiichi Sankyo in 2020, following promising signs in a Phase 1 trial, and moved the drug straight into a late-stage test in liposarcomas, citing feedback from regulators. Shares traded as high as about $20 apiece in May 2021.
But Rain’s shares, like the stock prices of many other biotech companies, have steadily declined in value since then. They fell further last week, when the company reported that milademetan failed to meaningfully slow tumor progression compared to standard treatment in its Phase 3 trial. Rates of severe side effects were also meaningfully higher than what was observed in earlier testing, according to a recent note from SVB Securities analyst Faisal Khurshid.
Rain CEO Vellanki said the company will analyze the results before putting more money into the drug program and, in the meantime, is cutting expenses. The company is eyeing potential acquisitions of precision cancer drugs as well, but didn’t disclose further details.