Following another PhII failure, cash-strapped Cerulean chops half its staff
Cerulean execs ended Wednesday trying to convince analysts, largely unsuccessfully, that its second Phase II failure for their lead drug could be contained and overcome in a new round of studies focusing their nano meds on a better target. They ended Thursday by announcing plans to lop off nearly half of their workforce, returning to a more manageable roster of 23 FTEs after their stock price had wiped out 56% of their market cap.
The Waltham, MA-based biotech won’t be backing away from its lead drug, though, now 0 for 2 in mid-stage studies. Cerulean CEO Christopher D. T. Guiffre had this to say:
“This reduction in force is a difficult but necessary step as we refocus our development priorities for CRLX101, our lead NDC candidate. I would like to personally express my appreciation to each of the employees impacted by this decision for their commitment to Cerulean and CRLX101. We remain committed to unlocking the power of this potential best-in-class topoisomerase 1 inhibitor, as well as realizing the promise of our pipeline and platform.”
The drug combo group (including Avastin) in the mid-stage trial for renal cell carcinoma actually performed worse than the control arm, with investigators reporting a 3.7 month median PFS for Cerulean’s drug compared with 3.9 months for standard of care. The objective response rate was even worse: 5% for the CRLX101 combination against 14% for standard of care.
The failure, following a setback for non-small cell lung cancer, left the company with a desperately short cash runway that they believe could be extended into the third quarter of 2017. With the stock price blasted, the layoffs were a likely next step. And management left little time to wonder about that.