Talaris Therapeutics plans to dial back its research plans and restructure, the latest setback for a biotechnology company that’s been reeling since the death of a patient in a clinical trial last year.
In a Thursday statement, Talaris said it’s halting two of its three ongoing human trials following a strategic review. The two trials being stopped were evaluating a cell therapy meant to build tolerance to a donated kidney following a transplant.
Talaris will continue its only other human study, a Phase 2 test of the cell therapy for the autoimmune disease scleroderma. But the company will reduce its workforce by a third and is evaluating its next steps, which could include a merger or sale of its cell therapy manufacturing capabilities. The company had 131 full-time employees as of Sept. 30, according to a November regulatory filing.
The announcement ends a lengthy journey for Talaris, a two-decade-old company whose work was once part of Novartis’ cell therapy division.
Originally known as Regenerex, Talaris was formed in 2002 by Suzanne Ildstad, a transplant surgeon and professor of surgery at the University of Louisville. Its goal was to develop a cell therapy that could make it possible for patients in need of an organ transplant to get one from any donor, without needing a life-long regimen of immunosuppressive drugs afterwards.
The program, FCR001, has been in the works ever since. It was licensed to Novartis in 2013, but development stalled when the Swiss drugmaker dissolved its gene and cell therapy division three years later. FCR001 was then reborn with the help of Blackstone’s life sciences arm, which in 2019 led a $100 million investment into Ildstad’s company, renamed it Talaris and restarted testing.
Talaris raised $150 million in an initial public offering two years later to advance the program, which had made it into Phase 3 testing. But the company’s shares have since lost nearly all of their value, the result of a sector-wide downturn and safety problems that emerged from that study.
Three patients in the trial developed graft-versus-host disease, a condition that occurs when the immune system sees a foreign organ as a threat and attacks it. One developed a chronic version of the disease and died, Talaris reported in October.
Though Talaris changed its trial protocol, analysts with SVB Securities questioned at the time whether the company’s study timelines and enrollment goals were in jeopardy. That’s now been borne out, as the company on Thursday cited the “pace of enrollment and the associated timeline to critical milestones” for stopping the trial.
“It was an exceptionally difficult decision to discontinue further development of FCR001 in kidney transplantation tolerance despite the promising early data,” said CEO Scott Requadt, a former Blackstone venture partner. “While we are disappointed that our work in kidney transplantation will not continue, given the potential of FCR001 to induce durable tolerance, we intend to continue its evaluation for scleroderma, which remains a very high unmet medical need for which there are limited treatment options.”
The company had $181 million in cash at the end of the year. Data from the company’s Phase 2 study could come in 2026, according to a federal clinical trials database.