A week after taking back two unhatched inflammatory bowel assets from Takeda, Finch Therapeutics is cutting more than a third of its staff and delaying clinical trial plans to stave off rising costs.
It’s undoubtedly a tough pill to swallow for the microbiome-centered biotech and the 37% of its workforce being shown the door. The company said in a release Thursday that it will now also delay plans to push FIN-211 into the clinic, which is currently being developed to treat autism spectrum disorder. In a statement, CEO Mark Smith said the company will “explore opportunities to leverage clinical data from ongoing third-party studies to inform our autism program strategy going forward.”
The moves stem from Takeda’s decision to hand back the rights to FIN-524 and FIN-525, to preclinical inflammatory assets that the two had been collaborating on for years. For FIN-524 namely, the dissolution marked the end of a five-year partnership.
When the deal was first announced in 2017, Finch was given a $10 million cash payment; the company later disclosed there were $180 million in milestone payments on the table as well. Two years later, Takeda added FIN-525 to its pipeline, with Finch working on feasibility studies. The latest update came in August 2021, when Finch disclosed that Takeda was taking a stronger hold of the development reins of FIN-524.
But emblematic of the throws of the biopharma industry, Takeda second-guessed that decision. The Japanese Big Pharma told Finch on August 19 that it was handing both assets back. All told, Finch took home $44 million, the bulk of which was a reimbursement for R&D costs.
When Finch announced Takeda’s decision Aug. 26, it was already foreboding, with Smith saying in a release that Finch was, “currently conducting a review” of its pipeline “and assessing the financial and strategic impact of the discontinuation of our collaboration with Takeda.”
It remains to be seen what the full impact of the ended collaboration means for Finch, which added that it will provide updates on its cash runway and each pipeline asset “in the future.” According to Finch’s second-quarter earnings report, the company had $104.7 million on hand at the end of June.