Walking Fish Therapeutics has closed after a lead investor backed out of a critical series B round.
CEO Rusty Williams, M.D., Ph.D., said in an interview with Fierce Biotech that the company was on the precipice of securing fresh capital to enter the clinic when an unnamed top investor backed out, citing concerns about the cost of a multiyear lease. The decision, which came after Walking Fish secured two federal ARPA-H grants to help take the pressure off internal financiers, stunned Williams.
“It was a shock,” the CEO said. “This investor just pulled out abruptly and said they wanted to shut down the company.”
As a result, 35 employees were laid off, which followed two other layoff rounds to help dwindle costs.
Endpoints News first reported Walking Fish’s closure.
Walking Fish was more than two years removed from a $73 million series A co-led by Northpond Ventures and First Spark Ventures. The biotech previously received funding from Illumina’s venture arm, Quan Capital and the Emerson Collective.
Less than a year ago, the company was adding to its leadership team, hiring Julie Kim as chief business officer and Nallakkan Arvindan, Ph.D., as chief technology officer. Kim joined from Quan after stints at Genentech and Roche, while Arvindan was the former CTO at Spotlight Therapeutics.
The financing and new hires were meant to help advance a three-asset portfolio of B-cell-based therapies, with a lead candidate designed to treat Fabry disease. That asset, WFX-001, was most recently in IND-enabling studies, according to Walking Fish’s website. The biotech intended to reconfigure B cells to help build proteins, including a deficient enzyme in patients with Fabry disease. The biotech also had two additional preclinical assets aimed at undisclosed targets. There’s “a fair amount of interest” in those assets, according to Williams, and conversations are ongoing to find a buyer.
Previously, Williams served as Five Prime Therapeutics' CEO for more than 15 years before its acquisition by Amgen. Before that, he was the chief scientific officer at Chiron, which ultimately was bought by Novartis for $5.1 billion. Now, he’s helming a new venture, Ten30 Bio, which is working on oral molecules.
Reflecting on Walking Fish’s work, Williams concedes that the cost of cell therapy manufacturing and associated clinical trial costs were difficult to overcome. It’s a painful conclusion that many others in cell therapy have realized as they pivot to treat autoimmune conditions.
“I think that B-cell therapy is likely to have its day; I think that what we were doing would have worked,” he said. “But it was just too expensive to get the phase 1 done in that financing environment.”