After swinging the ax on staffers, Five Prime Therapeutics loses CEO

Five Prime's Rusty Williams
Chief operating officer-turned-CEO Aron Knickerbocker took over from founding chief Rusty Williams (pictured). (Five Prime Therapeutics)

Less than two years after taking the reins from founding chief Rusty Williams, Five Prime Therapeutics CEO Aron Knickerbocker is exiting the company.

Knickerbocker, who had been the chief operating officer before substituting an E in that acronym in 2018 when Williams stepped down, has “resigned from the company to pursue new challenges and opportunities,” according to a statement from the South San Francisco biotech.

He will be replaced in the interim by Chairman Bill Ringo, “effective immediately,” as the company looks for a permanent successor. “I look forward to working with the talented executive team at Five Prime as interim CEO to ensure that all clinical programs remain on track as we enter a period where upcoming data events will provide insights to enable prioritization of clinical investments and pipeline programs,” said Ringo.

There was no departing quote from Knickerbocker, who it’s safe to assume will be turning up somewhere else in the near future.

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This comes after the immuno-oncology player said it would be axing 20% of its workforce and its early-stage R&D in order to focus on its clinical cancer programs. Five Prime made the announcement at the start of the year.

A total of 41 jobs were targeted as a result of the restructuring, mainly in research, pathology and manufacturing, allowing it to shave about $10 million off its 2019 operating costs, offset by $2 million in charges.

Five Prime expects to end the year with $148 million to $153 million in accessible cash, down from $270 million at the end of 2018, which gives an indication of its current high burn rate with five drugs in clinical trials.

This includes a phase 3 combo test with its experimental med bemarituzumab, a first-in-class isoform-selective antibody with enhanced antibody-dependent cell-mediated cytotoxicity. The drug is partnered with Chinese company Zai Lab.

As COO, Knickerbocker orchestrated the $1.74 billion partnership with Bristol-Myers Squibb that pairs the biotech’s I-O candidate cabiralizumab with BMS’ blockbuster Opdivo (nivolumab).

Cabiralizumab is in phase 2 for pancreatic and biliary tract cancers, but had mixed results in a phase 1 trial alongside BMS’ checkpoint inhibitor Opdivo toward the end of 2017.

Not all of Five Prime’s partnerships have developed as hoped, however, and in the summer of 2017 the company jettisoned a $460 million-plus alliance with InhibRx, saying it made the move to maintain a tight focus on priority programs that it can bring forward quickly.

The biotech, with a market cap of around $200 million, saw its shares slightly off by 0.5% in after-hours trading when the news was released Thursday evening. Over the past year, its shares have fallen from a high of more than $14 to $5.44 Thursday.