Hammered by a series of setbacks, NewLink axes staff (again) and circles its wagons around troubled IDO program
Three months after NewLink Genetics scrapped a combination program for its IDO pathway drug indoximod in the general rout that followed the failure of Incyte’s big IDO project for epacadostat, the biotech is nevertheless circling its wagons around a last stand effort to prove their therapy can work and make it to the market. In the process, the Iowa-based company has slashed close to a third of its staff and reorganized the C suite in the process.
Reducing the cash burn, NewLink — helmed by Chuck Link — says it expects to spend about $40 million a year, with enough cash to get into the second half of 2021.
Three years ago the stock $NLNK traded at around $55. Today it closed at $3.78, with a market cap of $140 million.
All the money is riding on a drug that has come under a very dark cloud indeed, since Incyte’s IDO drug imploded in a pivotal combination study with Keytruda. Once a darling of the I/O crowd as a likely winner in the race to develop next-gen drugs, Incyte’s success had inspired others to follow.
Incyte’s ugly failure had the reverse effect, forcing NewLink to scrap a Phase III while Merck and Bristol-Myers and AstraZeneca all reviewed their plans and retreated from ambitious development schedules. Now the company is axing 25 staffers in the restructuring while also turning to a related program for NLG802.
That’s about all NewLink has left. The biotech has been hit by a series of shuddering blows. A year ago Roche wrote off a collaboration on an IDO dubbed navoximod after that drug foundered in the clinic. And a year before that NewLink was forced to restructure after the failure of a pancreatic cancer vaccine.
The SEC filing by NewLink today also revealed that CFO Jack Henneman resigned his position to become chief administrative officer as he plans his departure for later in the year. He’ll get $42,360 plus a bonus and 12 months salary for severance. Chief commercial officer Brian Wiley left a few days ago.