With their lead drug stuck on a full clinical hold and no hope of relief before the end of this year — a year after it had initially forecast the end of its spell in purgatory — Regulus Therapeutics $RGLS is bidding goodbye to its CEO (again) and slashing staff.
After the market closed on Thursday the beleaguered company announced plans to cut its headcount by 30%, or approximately 30 staffers after it listed 97 employees at the end of 2016. CEO Paul Grint, who stepped up from the CMO’s job after founding CEO Kleanthis Xanthopoulos resigned in 2015, is leaving the company, with COO Jay Hagan replacing him at the helm.
Regulus was created in 2007 as a joint venture between Alnylam and Ionis, then called Isis, with a special focus on microRNA therapies.
The new CEO’s first task was to reassure investors that the company is squared away and focused on hitting its marks with a second therapy, RG-012. But the message didn’t sit well with its intended audience.
The biotech’s stock cratered again, dropping 30% on the news of the latest setback and changing of the guard. It’s now trading at a little more than a dollar a share, just a fraction of what it was two years ago.
Lead drug RG-101 went on full clinical hold last summer after a second patient came down with jaundice. Grint insisted that the team could get all of the agency’s questions answered by the 4th quarter of 2016, then in January said that the FDA wanted more safety and efficacy data that wouldn’t be available until the 4th quarter of this year.
Things looked considerably better a year ago when RG-101 appeared to look good in a small Phase II study for hep C, with high cure rates. Now the entire market is experiencing a swoon as leaders like Gilead cure patients at a faster pace than they can be diagnosed. RG-101 had potential to cure patients in just a few weeks, but that added value is shrinking steadily in significance to payers.
Regulus had $57.5 million at the end of the first quarter, with plans to circle its wagons around a Phase II study for RG-012 for Alport syndrome, a genetic condition that triggers the gradual loss of kidney function. Net loss for the first quarter was $20 million.
“We are very grateful for the leadership of Dr. Grint and the many contributions of our other impacted employees who have dedicated themselves to Regulus’ efforts in advancing the science of microRNAs,” said Stelios Papadopoulos, the company’s board chairman. “We are confident that Regulus is well positioned for success under Jay’s guidance.”
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