Ikena Oncology is again shrinking its herd and signaling a tough fight ahead as one of two assets, a TEAD1-selective Hippo pathway inhibitor, is cut.
The cancer biotech is laying off more than half of its workforce, which means 18 people, according to a Tuesday regulatory filing. The move comes after January cuts saw 35% of the workforce let go.
Ikena expects to incur $1.2 million in expenditures related to the most recent round of layoffs, which will be completed in the third quarter. About 16 employees are expected to remain on staff when all is said and done, according to the filing.
At the same time, the company is axing development of IK-930, which is one of two meds Ikena had zeroed in on during the January reprioritization. The therapy had been under development for mesothelioma and epithelioid hemangioendothelioma.
Now, Ikena will solely focus on the molecular glue IK-595 for RAS and RAF mutant cancers. A phase 1 trial is currently enrolling, with additional cohorts expected to be added in the second half of this year.
Despite all of these dramatic cuts, the company is still not in the clear. Ikena said it is also evaluating strategic options for the company and its development pipeline, which could include an acquisition, merger, asset sale partnership or other transactions, the filing stated.
“Ikena is in a strong position to create value through multiple avenues. We have been diligent with our capital expenditure, fortifying a cash position that may unlock new strategic opportunities for the company, in addition to the parallel partnership potential of our pipeline,” said Chief Financial Officer Jotin Marango, M.D., Ph.D., in a Tuesday evening press release.
The biotech had $157 million in cash and equivalents as of March 31.
William Blair analysts called the reprioritizations a tough decision and the discontinuation of IK-930, particularly, a “disappointment.” The therapy had been rejigged after an earlier clinical failure, and William Blair had been expecting a meaningful catalyst to come later this year thanks to the treatment.
Executives pointed to a limited market opportunity for IK-930 alone and a long timeline to prove it can provide benefit in a combination regimen. IK-595, meanwhile, is advancing through the clinic a little faster, William Blair noted.
“Clear single-agent activity with IK-595 will be needed to generate significant interest and share appreciation beyond the cash balance,” the analysts wrote. “Management emphasized that it is enthusiastic about the profile of IK-595 to date and the potential for a more straightforward development path in much large market opportunities.”