Following job cuts and R&D restructuring, microcap microRNA player miRagen brings in new CEO to right the ship
Four years after riding the shell of a struggling microcap biotech to Nasdaq with $40 million in cash, microRNA player miRagen Therapeutics is facing a reckoning of its own.
After the market close Thursday, miRagen disclosed a flurry of changes at the company: CEO William Marshall has resigned, leaving COO Lee Rauch in charge as the new chief to oversee a “review of strategic alternatives” — often a sign that the board is eager for a sale, although in-licensing and other deals are also on the table.
Rauch, a biotech vet who joined just three months ago, is taking over a year into a cost restructuring plan that Marshall began last August, which involved slashing the workforce by half and eliminating 44 positions, mainly in R&D and administrative teams. Discovery research was to go on the backburner while miRagen pushes the four core programs it already had.
In conjunction with the shakeup, miRagen notified investors that it’s crowning the preclinical program MRG-229 its lead compound, prioritizing it over the three clinical-stage drugs.
The idea is to treat idiopathic pulmonary fibrosis by reversing the abnormally low levels of microRNA-29 with the conjugated mimic.
“We believe that fibrosis is an ideal disease process for the use of microRNA therapeutics,” Rauch said in a statement. “This includes MRG-229, a replacement for miR-29, which targets the important genes and pathways that are central to the development of abnormal extracellular matrix deposition resulting in fibrosis.”
Remlarsen, which works in a similar way, is in Phase II for cutaneous fibrosis and being explored for ocular fibrosis. The difference is that it is designed for local administration, while MRG-229 had potential applications in pulmonary, renal and hepatitis fibrosis with its systemic mechanism.
Also deprioritized for now are cobomarsen, the microRNA-155 inhibitor positioned for cutaneous T-cell lymphoma and adult T-cell leukemia/lymphoma, as well as MRG-110, an inhibitor of microRNA-92 designed to target heart failure, wound healing and other ischemic disease.
With $30.6 million of cash and cash equivalents plus $8.1 million of outstanding debt by the end of H1, miRagen had recently outlined a runway to Q3 2021.
Board chairman Jeff Hatfield said miRagen is now banking on Rauch’s “extensive experience in company building, corporate strategy and business development” to set a course for the future.
Some investors aren’t sticking around. Shares $MGEN fell 5.32% pre-market, although that means little when the stock is just trading at $0.89.