Aduro's staffers feel the sting, again, after Novartis walks away

lymphocytes
Aduro Biotech, which has a focus on cancer, has seen several Big Pharmas walk away from drug partnerships. (La Jolla Institute)

It’s grim news ahead of the J.P. Morgan Healthcare Conference next week for Aduro Biotech.

The company, which is working on so-called STING and APRIL pathways to try to halt cancer, autoimmune and inflammatory diseases, already cut more than a third of its staffers 12 months back, with that coming off the back of some weak trial results.

Now, it’s cutting a further 59% of its workforce as well as axing its headquarters, known as Aduro Biotech Europe, in Oss, Netherlands, by the end of the third quarter.

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These moves, it says, are all part of a program to slash costs even further and extend its run time to continue to try and push on with its 2018 research deal with Eli Lilly for its cGAS-STING pathway inhibitor. It got $12 million upfront for the deal and $620 million in potential biobucks per drug that come out of the collab, as well as any royalties, and so is banking on this for its future.

“Upon conducting a thorough analysis of our STING and APRIL programs and our cGAS-STING collaboration with Eli Lilly, as well as consideration of our current resources, Aduro’s Executive Team and Board determined implementing changes to reduce operating expenses and extend our cash runway is critical to our business,” said Stephen Isaacs, chairman, president and CEO of Aduro.

“We are creating a more streamlined organization by focusing on generating clinical data and identifying candidates for the cGAS program to bring forward into development. While this means that we are not able to retain the entirety of our current workforce, Aduro continues its development and research efforts supported by an incredibly talented team that is fully invested in the future of the company.”

Almost exactly a year ago, Aduro made its first round of cuts and “deprioritized” several programs, including pLADD, ADU-1604 (anti-CTLA-4) and ADU-1805 (anti-SIRPα), Isaacs said.

The Berkeley, California-based biotech has been successful signing deals over the years: It first teamed up with Novartis on targeting STING (stimulator of interferon genes) back in 2015.

The Big Pharma paid $200 million upfront and took a 2.7% stake in Aduro for $25 million. It also committed to as much as $500 million in milestones and promised to invest another $25 million later on.

Aduro also inked a deal with Merck to test its anti-CD27 agonist with the Big Pharma’s Keytruda in 2017 and picked up a $3 million milestone the next year when they expanded the collaboration, as well as that deal with Lilly.

But while good at getting those signatures, it’s not been great at holding onto them. In October 2018, Janssen told Aduro it would end a research collaboration struck in 2014. Aduro had granted Janssen an exclusive, worldwide license to "research, develop, manufacture, use, sell and otherwise exploit products containing ADU-214, ADU-741 and GVAX Prostate."

Novartis late last year followed suit, saying in a quiet Securities and Exchange Commission filing that Novartis “has removed ADU-S100 (MIW815), an intratumoral STING pathway activator product candidate, from its portfolio based on clinical data generated to date.”

The biotech ended the day down more than 4% and over 2% after-hours Thursday evening on the news.

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