There has been no sign in this quarter’s earnings results that the tide of layoffs will be receding from biotech anytime soon. The wave of postmarket releases Wednesday brought news that both SQZ Biotechnologies and Regenxbio are slimming down their head counts to make every dollar count.
By far the most brutal cutbacks were at SQZ, which is letting go of fully 80% of its workforce as the cell therapy company seeks a long-term survival plan.
The biotech’s board made the drastic call in a meeting at the end of September, SQZ explained in its earnings release: “The decision was based on cost-reduction initiatives intended to reduce the company’s ongoing operating expenses while it pursues strategic alternatives."
“We have taken difficult, but necessary, steps to reduce our operating expenses as we explore strategic alternatives,” interim CEO Howard Bernstein, M.D., Ph.D., added. “The management team and the board firmly believe in the technology and therapeutic potential and are committed to exploring a variety of potential paths.”
The company ended September with $10 million left in the bank, having already spent $7.7 million on restructuring charges in the quarter. Money has been especially tight since Roche dropped its option on a solid tumor program back in July, ensuring that the $1 billion in potential milestones would forever be out of SQZ’s reach.
The biotech is “actively seeking potential partnerships” for its remaining programs, which include its Activating Antigen Carriers platform for oncology. Of the five patients treated so far, one has experienced a complete response and two saw their disease stabilize, SQZ added.
SQZ has also completed enrollment in the highest-dose cohort of a dose escalation trial of its enhanced Antigen Presenting Cell platform. Eight of the 20 patients have reported their cancer stabilizing so far, SQZ pointed out.
Those programs are what’s left of the company’s portfolio after a previous downsizing—which included a 60% workforce reduction—at the end of last year.
While the 15% reduction in head count announced at Regenxbio yesterday appears less severe in comparison, the gene therapy biotech is also having to do some soul searching.
The company is now prioritizing its clinical-stage AAV therapy programs, headed up by an AbbVie-partnered therapy for chronic eye conditions like wet age-related macular degeneration and diabetic retinopathy. Also receiving special treatment will be RGX-202 for Duchenne muscular dystrophy and RGX-121 for a rare inherited disorder called Hunter syndrome.
Despite having made it into the clinic, Regenxbio will look to partner off its neurodegenerative programs, namely RGX-111 for severe mucopolysaccharidosis type I as well as RGX-181 and RGX-381 for a form of Batten disease.
These changes will allow the company to lose 15% of staff, freeing up an estimated $100 million in total. Along with the $365 million the biotech has in the bank, Regenxbio predicts it will have enough funds to keep the lights on into the second half of 2025.
"In the past two months, we reported exciting, positive clinical data from investigational treatments for diabetic retinopathy, and Duchenne, as well as had a very encouraging RMAT meeting with the FDA about expediting the BLA for our treatment for [Hunter syndrome],” CEO Kenneth Mills said in the release.
"These milestones demonstrate how our science is supporting avenues to accelerate development, and, today, we are following the data and making necessary decisions to focus our capabilities and resources on these differentiated product candidates which represent opportunities to bring ground-breaking AAV therapeutics to millions of patients,” Mills added.