Exscientia cuts a quarter of staff while preserving AI-generated pipeline

Exscientia is initiating “efficiency measures” to save cash, which will include a workforce reduction of around a quarter of staff while preserving the AI drug hunter’s existing pipeline.

The program is expected to save about $40 million annually beginning in 2025, with expected severance and termination costs between approximately $7.4 million and $9.6 million, according to the company’s Tuesday morning earnings release. The charges will be recorded in the second quarter and stretch through the rest of the year.

The cuts are expected to impact between 20% and 25% of staff and will be completed by the end of this year. The company is said to have just under 500 employees.

Exscientia also expects to see several multi-year investments come to conclusion, resulting in efficiency improvements. These include projects related to the biotech’s proprietary technology platform.

The pipeline, led by the phase 1/2 solid tumor drug GTAEXS617, will remain the same. Initial phase 1 data from the trial is expected in the second half of the year. Next in the clinic is EXS4318, which has been in-licensed by Bristol Myers Squibb and is currently undergoing a phase 1 study in inflammatory diseases.

Exscientia slashed down its pipeline in October 2023, keying in on the CDK7 asset GTAEXS617 and the LSD1 inhibitor EXS74539. Several programs were removed from the lineup and prepped for partnerships. 

Exscientia’s cash runway is expected to stretch “well into 2027,” according to the earnings release. The company had $416.9 million in cash and equivalents as of March 31, compared to $458.8 million at the end of 2023.

The efficiency program comes three months after Exscientia fired CEO Andrew Hopkins after the board determined he had engaged in two personal relationships with employees that were deemed “inappropriate and inconsistent” with company values.

As a result of the termination, Hopkins forfeited his share options resulting in credits totaling $7.5 million, which also contributed to the decrease in general and administrative expenses for the quarter. These expenses decreased by a total of $9.4 million compared to the same period a year earlier.

Chief Scientific Officer Dave Hallett remains as interim CEO as the company conducts a search for a permanent replacement. 

Elsewhere in the biotech world, Lyra Therapeutics executed a workforce reduction that cost 87 employees their jobs, including Chief Technology Officer John Bishop, Ph.D. The layoffs are effective today for 80 people, and on June 20 for the remaining seven, according to an SEC filing.

“The board’s decision was based on cost-reduction initiatives intended to reduce the company’s ongoing operating expenses and maximize shareholder value,” according to the filing.