Bear market forces another biotech into layoffs, as antibody developer Atreca reduces headcount by more than 25%
Another biotech felt the chill of the bear market late Wednesday, engineering a round of layoffs in order to stay afloat through the end of next year.
Microcap antibody player Atreca will lay off more than 25% of its workforce to extend its cash runway through 2023, the company announced Wednesday, giving it the money it needs to complete the latest trials for its two pipeline programs. The move comes as Atreca expects to read out new data for its lead candidate, ARTC-101, before the end of the year.
“While it is difficult to part with so many talented and valued members of our team, we view this as a necessary step to ensure we have the capital required to execute on our mission,” CEO John Orwin said in a statement. The company had 134 employees as of March 31.
Atreca shares $BCEL didn’t move much on the news, falling roughly 3% post-market Wednesday. The biotech, having previously raised $125 million in a 2018 funding round and another roughly $125 million in a 2019 IPO, also plans to delay enrollment in the chemotherapy combination arm for ARTC-101’s Phase Ib study.
ARTC-101 is the only program to reach the clinic so far, though Atreca recently announced it would file an IND for its second candidate, ARTC-301, sometime next year. ARTC-101 is currently being studied in monotherapy and combination cohorts with Merck’s Keytruda in certain solid tumors.
The most recent data cut came back in March, when Atreca said it had observed one complete response and one partial response among 12 evaluable patients at the “higher dose levels,” though the company did not specify. The complete response came in the Keytruda combo arm while the PR came in the monotherapy cohort.
Analysts expect Atreca’s upcoming data readout for this program, anticipated in the second half of 2022, to be a significant event for the company. Jefferies’ Roger Song is hoping the company will see between five and 10 responses in the monotherapy arm at the highest dose level.
And in a rather blunt note Wednesday evening, Stifel’s Stephen Willey viewed the layoffs “favorably” and described them as “well-timed.” He also appeared to endorse that other biotechs undertake this strategy, writing “this proactive decision … represents the kind of forward thinking/planning we believe is needed in this current market environment.”
Going forward, Atreca has about $125 million in cash saved up from the end of 2021. With expected severance costs of $700,000, per an SEC filing, Atreca is hoping the money will last through the end of 2023.