Following massive layoffs earlier in the year, Finch Therapeutics is increasingly confident the severe restructuring will allow the biotech to eke out its cash runway into 2025.
The Massachusetts-based company, which threw in the towel on a phase 3 Clostridium difficile study and laid off 95% of staff in January, has stretched its cash and is continuing to reorganize, according to a yearly earnings report for 2022.
“As part of our restructuring, we have significantly decreased costs by reducing vendor and employee expenses, extending our expected cash runway into 2025,” Finch Therapeutics CEO Mark Smith, Ph.D., said in a March 23 release.
The company is burning through its remaining cash fast, with only an estimated $43.3 million available in cash and equivalents by the end of February compared to the $71 million it entered the year with. Still, the biotech claims what's left will be enough to fund the company for another two years.
In January, Finch repaid $16.2 million to Hercules Capital, fully paying off its debt facility to the lender.
The remaining cash is expected to hold the company over through an anticipated jury trial with Ferring and its Rebiotix unit, which is slated for May 2024, according to CEO Smith. The issue centers around Rebiotix’s enema preparation product RBX2660, which Finch alleges is being developed without authorized use of its intellectual property.
The biotech has endured a rough couple of years amid concerns that its therapeutics, which are made from stool samples, could infect patients with COVID-19. Finch looked to have finally resolved the problems, allowing it to restart the phase 3 C. diff trial but ultimately resorted to discontinuing the CP101 study and laying off most of its team in the face of a frosty funding forecast and slow enrollment.
Scrapping the study ended R&D ambitions for the biotech and left a skeleton crew to focus on “realizing the value of its intellectual property estate and other assets.” The company’s list of assets include CP101, preclinical programs in ulcerative colitis, Crohn’s disease and autism spectrum disorder, and more than 70 patents.
Finch continues to seek out partnerships with research institutions for its microbiome technology, according to Smith.