Reeling from triple phase 3 failure, AlloVir cuts 95% of workforce

Reeling from triple phase 3 failure, AlloVir cuts 95% of workforce

Less than a month after AlloVir suffered a triple phase 3 failure, the allogeneic T cell immunotherapy biotech is cutting 95% of its workforce.

The company is making the drastic move in light of the December 2023 discontinuation of the three unsuccessful studies of posoleucel, an off-the-shelf multi-virus-specific T cell therapy, which was being developed to prevent infections or diseases caused by multiple viruses.

The board approved the layoffs on Jan. 1, according to a regulatory document (PDF) filed on Thursday. The cuts are expected to take place mostly in the first quarter of this year and finish up by Apr. 15.

AlloVir will incur expenses of about $15 million tied to personnel-related restructuring charges from one-time employee termination cash expenditures, including severance payments and other benefits. This is expected to be mostly incurred in the first quarter, AlloVir said.

The layoffs are an attempt to reduce costs and preserve capital, AlloVir said.

After the phase 3 failures, the biotech’s shares plunged 64% to 83 cents. The stock was trading at 68 cents pre-market Friday.

Posoleucel was being tested in three indications for allogeneic hematopoietic stem cell transplant patients: to prevent clinically significant infections or diseases from multiple viruses; virus-associated hemorrhagic cystitis (vHC); and for adenovirus. But three independent Data Safety Monitoring Boards recommended stopping the studies after determining that they were unlikely to meet their main goals.

Afterward, AlloVir moved to discontinue the studies for its lead asset and moved forward with a review of strategic alternatives including a merger, company sale or divesting assets.

Across the industry, 2024 has started off looking a lot like 2023, with a flurry of layoffs hitting companies such as Intellia Therapeutics, Pfizer and Aera Therapeutics in the opening days of the year.

error: Content is protected !!