In 2022, Kineta swooped in to rescue Yumanity’s immunotherapy from the scrapheap. Now, Kineta needs some rescuing itself.
After a strategic review, the small oncology biotech is conducting a corporate restructuring and reducing its workforce by 64%, or seven positions, including CEO Shawn Iadonato, Ph.D. Enrollment of new patients will also cease in a phase 1/2 trial of KVA12123—the very drug that Kineta snapped up as Yumanity wound down operations in 2022.
In June of that year, Yumanity struck two deals as it looked to cease operations. Johnson & Johnson’s Janssen unit picked up Parkinson's disease med YTX-7739 plus a number of other clinical neuroscience assets. Then Kineta merged with Yumanity in an all-stock transaction that focused on the VISTA blocking immunotherapy for solid tumors including non-small cell lung cancer, colorectal, renal cell carcinoma, head and neck, and ovarian.
In a January update, Kineta said KVA12123 had cleared the four initial monotherapy doses and initial combination cohort and no dose-limiting toxicities had been observed. There was also preliminary evidence of anti-tumor activity. The VISTA-101 study is now closing to new patients, but existing patients will be allowed to continue on treatment.
“The company has made this decision, in part, because certain investors have indicated they will not fulfill their funding obligations pursuant to the previously disclosed second tranche of the company’s contemplated private placement later this year,” Kineta said in a Thursday release.
In order to maximize shareholder value, Kineta will explore strategic options including a sale of assets, sale of the company, licensing of assets, a merger, liquidation or other potential actions. The company will “substantially curtail operations” before the end of the first quarter of this year, according to a related SEC filing (PDF).
Meanwhile, Iadonato will leave along with six of his colleagues, although the outgoing CEO will retain a seat on the board of directors. Also leaving is General Counsel and Secretary Pauline Kenny. Both will continue on in a consulting capacity until December 31.
“We continue to believe in the promise of KVA12123 and are enthusiastic about the trial data that has been collected to date,” Iadonato said. “We are deeply disappointed that certain investors in the April financing will not fulfill their funding obligations.”
Kineta ended the third quarter of 2023 with $7.6 million on hand, compared to $13.1 million at the end of December 2022. The company expected that narrow runway to last into early 2025 because an additional $22.5 million from the second closing of a private placement was due in April of this year.
But it seems some or all of that cash is no longer coming. Kineta had been warning of the consequences of the inability to close the second tranche of the private placement in its forward-looking statements prior to today's announcement.
Kineta will not provide any updates on the situation until a definitive agreement is found or a transaction is secured.