Bear market hits another small cap biotech as Ahmed Hamdy's Vincerx cuts a third of staff
The biotech bear market continues to put pressure on small and mid-cap companies, with another startup undergoing a shift.
Cancer-focused biotech Vincerx revealed it would lay off 33% of its staff Monday afternoon as part of an effort to get its lead program through two Phase I studies. The move comes a little less than two years after Vincerx went public via a SPAC, and after its stock $VINC has fallen more than 80% in 2022.
“Reducing our staff was not an easy decision,” CEO Ahmed Hamdy said in a statement. “It was the tremendous effort of our Vincerx colleagues that allowed us to execute efficiently, despite the extreme pressures of the pandemic.”
Vincerx joins the long and still-growing list of biotechs that have been forced to save money through layoffs or other cost-cutting reorganizations this year, as the market continues its bearish run. Already this month, the industry has seen Praxis, Amarin, Athersys, Centessa and Atreca reduce their headcounts or announce plans to do so, and Passage Bio’s CEO departed.
Some cash has been accessible for biotechs putting out positive clinical data — including a 24-hour period in March that saw a trio of companies raise $1.5 billion — but for those yet to reach that milestone, funding remains hard to come by.
For Vincerx, the goal is to have enough money to run two clinical studies for its lead drug, a small molecule designed to inhibit P-TEFb phosphorylation of RNA polymerase II (RNAPII)/CDK9. The program, known as VIP152, was in-licensed from Bayer and is currently being studied in double-hit diffuse large B-cell lymphoma and high-risk chronic lymphocytic leukemia as a monotherapy.
Monday’s cash-saving measures are also aimed at getting INDs through for three preclinical programs: VIP236 for solid tumors in the second half of this year; VIP943, an anti-CD123 molecule in the second half of 2023; and VIP924, an anti-CXCR5 compound in 2024.
Vincerx got started after Hamdy, one of the key co-founders at Acerta, left his former digs to launch his new project out of stealth in September 2020. He immediately made the quick jump to Nasdaq through the SPAC route at a time when the blank check market was heating up.
Hamdy’s SPAC partner, LifeSci Partners, had launched multiple shell companies to get biotechs onto Nasdaq quickly. Its second SPAC completed its merger with Science 37 last October, while the third blank check vehicle continues to search for a partner.