Shares plummet as Genocea cuts staff, shifts to I/O
- Cambridge, MA-based biopharma Genocea Biosciences announced a restructuring this week, saying it would shift to immuno-oncology and neo-antigen cancer vaccines and move away from its previous work in infectious diseases.
- As part of the reorganization, Genocea will pivot to its preclinical lead vaccine GEN-009 and cut its GEN-003 genital herpes immunotherapy, which was due to move into a Phase 3 trial by the end of 2017.
- The reorganization also includes staff layoffs of about 40%, which will save around $6.5 million a year after a one-time cost of around $1.1 million. This will allow Genocea to extend its cash runway to the middle of 2018.
The move startled investors, leading to a stock price drop at over 76% at close on Tuesday.
Genocea Biosciences is putting faith in its antigen identification capabilities and vaccine expertise, and focusing its now somewhat limited financial assets on a pre-clinical personalized cancer vaccine, GEN-009. The vaccine uses the company's ATLAS platform to identify neoantigens from an individual patient, which will then be synthesized into a vaccine for that patient. The company plans to file an investigational new drug (IND) application by early 2018.
Neoantigens are a buzzword in cancer immunotherapy. Created as a result of a tumor-specific mutations, these antigens can seen as crucial in the development personalized cancer immunotherapy.
Development will be funded through workforce cuts and out-licensing its Phase 3-ready genital herpes therapeutic, GEN-003. The company is also seeking partners for GEN-004, a universal pneumococcus T-cell preventive vaccine that reached Phase 2 in 2015, but did not show statistical significance against placebo and was therefore put on pause.
Genocea is also looking for partners for a Chlamydia therapeutic vaccine in preclinical development; and a malaria therapeutic vaccine at discovery stage. As with GEN-003 and GEN-004, these latter two programs have been suspended pending partnering.
"We see this strategic process, which is already underway, as the best way to drive to commercial launch and maximize shareholder value from GEN-003," said Chip Clark, president and CEO of Genocea.
While Genocea didn't lay out specific reasoning for the shift, it could stem from concerns about the viability of its Phase 2 genital herpes therapy and the challenge of carrying out a Phase 3 study in this field.
- Genocea Biosciences Press release
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