Can Rain ride the storm out? Cancer biotech lays off 65% of workforce after phase 3 fail

When it rains, it pours—an old adage that Rain Oncology hasn’t been able to shelter from. After a phase 3 fail, the precision oncology biotech is saying farewell to its chief medical officer, halting programs and laying off 65% of its workforce.   

The changes are being made to reduce cash burn, with the hopes of extending a cash runway to the end of 2026, according to a May 30 release. The cuts come a little more than a week after the company’s lead asset milademetan failed to improve progression-free survival versus chemotherapy in a phase 3 trial of patients with liposarcoma, a rare cancer that develops in fatty tissue.

Rain acquired the oral, small molecule inhibitor from Daiichi Sankyo in 2020 and built its pipeline around it, testing the therapy in an array of solid tumor indications. The biotech plans to walk away from the liposarcoma indication after last week's fail.    

“We are working diligently, as additional information continues to come in, to analyze and understand the outcomes in the phase 3 MANTRA study in DD LPS,” Rain CEO Avanish Vellanki said May 30. “It is imperative we understand those outcomes before allocating further capital to the milademetan program, with corporate expenses to be greatly reduced to maximize optionality for Rain.”

The biotech is suspending enrollment in a phase 2 trial assessing milademetan in patients with advanced solid tumors that have MDM2 gene amplification and will no longer launch a planned phase 1/2 milademetan combo trial.   

Rain will also explore options that could “enhance” its pipeline through precision oncology program acquisition, according to the company release.

And Chief Medical Officer Richard Bryce will head out the door as well, with Robert Doebele, M.D., Ph.D., Rain president and chief scientific officer to take on the role. The biotech will also lay off 65% of full-time employees, and implement “careful workforce management, including employee attrition.”

Since market close Friday, Rain’s stock has fallen 10% from $1.10 to $1 today as of 10:15 a.m. ET.