Five Prime's new CEO wields ax, laying off 70 staffers

Five Prime Therapeutics’ interim CEO William Ringo (Five Prime Therapeutics)

Five Prime Therapeutics’ interim CEO William Ringo has moved to lay off 70 employees within weeks of taking up the position. The cuts will leave Five Prime with a “small research group” focused on taking clinical candidates forward with the help of service providers and contractors.

California-based Five Prime has several in-house, clinical-phase cancer programs. The lead program, FGFR2B antibody bemarituzumab, is set to go through a phase 3 futility analysis in the first half of next year. In parallel, Five Prime is running earlier-phase assessments of an B7-H4 antibody and a CD80-Fc fusion protein. 

Five Prime narrowed its focus to those candidates at the start of the year when it laid off 41 staff, which at the time represented around 20% of its headcount. Now, Five Prime is cutting deeper still.

Ringo plans to lay off 70 people across all functions. Around 50 of the layoffs will happen this year, with the remainder following in 2020. When combined with plans to sublet facility space, Five Prime expects the cuts to lead to annual savings of $20 million.

Five Prime still expects to end the year with around $150 million in the bank, but the cuts should see that money go further in 2020 and beyond. Ringo framed the layoffs as a way to give Five Prime the runway to “prioritize future pipeline investments based on clinical data readouts” in a statement to disclose the news.

A decline in Five Prime’s share price has limited its ability to raise money to extend its cash runway without making cuts. Five Prime shares traded at close to $60 a share in 2016, but its stock price now languishes under $5. 

The biotech has shrunk in size over that period, too. Going into 2019, Five Prime had 209 full-time staffers, 121 of whom were focused on R&D. After the January cuts, Five Prime had 168 full-time employees, 81 of whom were focused on R&D. 

Five Prime is yet to break down the latest cuts to show the exact impact on R&D but has provided a rough overview. With just a “small research group” surviving the cull, Five Prime will need to lean more heavily on CROs and other third parties than in the past to take its programs forward.