Layoffs are in store for employees at both Longeveron and Nicox, although neither company is spelling out how many staff will be affected.
Regenerative medicine biotech Longeveron has made the “strategic decision” to discontinue a phase 2 trial of its lead candidate Lomecel-B in aging-related frailty in Japan. The move would result in “related staff reductions” that the company listed as part of “cost-saving measures.”
“Longeveron management continues to believe in the potential of Lomecel-B in this disease state and will evaluate options for continued development at a future date,” the company insisted in a full-year earnings report yesterday.
The biotech is also hunting for “potential partnerships or other sources of funding” to justify continuing to investigate the drug in Alzheimer’s disease. As recently as December, Longeveron was touting data from a successful phase 2 trial of Lomecel-B in Alzheimer’s, which it claimed “improved cognitive function in multiple measures in a dose-response fashion.”
Lomecel-B is made up of medicinal signaling cells from the bone marrow of adult donors that are culture expanded at a cell processing facility. Yesterday’s strategic shake-up means the biotech is now focusing resources on completing enrollment in a phase 2 trial of the living cell therapy in hypoplastic left heart syndrome (HLHS), which CEO Wa’el Hashad described as “our most important near-term value driver.”
A quick glance at the company’s finances makes clear why Longeveron is narrowing its focus so significantly. The biotech entered 2024 with $5.4 million in cash and equivalents, which was expected to run out by July.
“We are actively seeking financing opportunities to extend our cash runway while taking measures to reduce our cash expenditures as we focus our resources on our primary strategic program in HLHS,” the company said in yesterday’s release.
Tight finances are also behind Nicox’s plans to reduce operation costs. The ophthalmology biotech has agreed to an amendment to the repayment of a 16.9 million euros ($14.5 million) debt with Kreos Capital, which will extend the company’s cash runway to November.
But, to secure this deal, Nicox had to agree to “reduce its operations in France and Italy” as well as cut operating costs and restructure the company so it’s focused on completing the latest phase 3 Denali trial for glaucoma drug NCX 470.
“The additional cash runway and the overall reduction in cash needs gives us the flexibility to advance our core asset and continue partnering and strategic discussions,” Jean-François Labbé, chairman of Nicox’s board of directors, explained in the Feb. 28 release.
This means that an undisclosed number of staff tied to Nicox’s home country of France as well as working at its Italian subsidiary will be laid off. “The development team in the U.S., considered essential for the completion of the Denali trial, is not impacted by these changes,” the biotech added.
In connection with the downsizing, three members of Nicox’s board will also be departing: Adrienne Graves, Ph.D., Lauren Silvernail and Luzi von Bidder. In a separate announcement on the same day, the biotech revealed that Chief Business Officer Gavin Spencer had been promoted to CEO.
Fierce Biotech has contacted both Longeveron and Nicox for more details about how many staff will be affected by the respective workforce reductions but had not received a response at time of publication.