To pave a longer runway, Pyxis to cut staff, reprioritize and offload brand-new Apexigen assets

Pyxis Oncology needs to pave a longer cash runway. To do so, the Pfizer-partnered antibody-drug conjugate (ADC) biotech is cutting 40% of staff, slimming its programs and looking to monetize royalty opportunities from a recently acquired company—among other cost-cutting measures.

It’s a stark change from the recent headlines around ADC-focused companies, which have been snagging deals with Big Pharmas left and right.

Pyxis, which went public in fall 2021, is hoping the tough decisions will help prioritize programs with the highest likelihood of success. The pipeline will continue to focus on lead tumor stroma-targeting ADC PYX-201 and secondary program PYX-106 in non-small cell lung cancer (NSCLC), with early-stage research programs paused.

“In order to maximize PYX-201’s chances of success, as well as those of PYX-106, we are announcing a number of initiatives to extend our cash runway into 2026, which we believe is the responsible thing to do in the current funding environment,” CEO Lara Sullivan, M.D., said in a postmarket release Tuesday. “We believe the actions we are taking best position Pyxis Oncology for future success, with our current cash resources now taking us beyond important near-term 2024 readouts for our ongoing clinical trials.”

PYX-201, which was in-licensed from Pfizer, is being tested in a phase 1 trial of patients with solid tumors at the moment. The fifth dose cohort recently opened for enrollment, and 15 people have been dosed in other groups so far. The company believes that the swift escalation in dosing “speaks to the potential safety profile” of the therapy. Preliminary phase 1 data are expected in the first half of 2024.

“Based on data from Pfizer’s HER2 ADC previously under development with the same linker and payload and our preclinical experiments, we believe that at 3.6 mg/kg and above, we are approaching biologically active dose levels,” Sullivan said.

PYX-106 was originally being targeted at a wider array of tumors, but Pyxis has decided to only include patients with NSCLC. Dosing had already gotten underway in a phase 1 test, so, with the “repositioning,” initial results are now anticipated in the second half of 2024. Pyxis said the update does not increase costs of the trial.

Another med in the pipeline is sotigalimab, which came under Pyxis’ purview with the May acquisition of Apexigen and has been renamed PYX-107. The new owner has not yet decided the future for the CD40 agonist, which is being tested in phase 2 for melanoma and liposarcoma. But one thing is for sure, PYX-107 will have to wait until the phase 1 data for PYX-201 are available, Pyxis said. Then, the legacy Apexigen med “will be further assessed as part of portfolio evaluation.”

As cash resources shift to the two main programs, Pyxis will say goodbye to 40% of its staff. The company's current workforce is estimated to be around 75 people, according to LinkedIn and Crunchbase.

With $134 million in cash as of Sept. 30, the company expects the runway to last through the upcoming major milestones for the two main programs into early 2026, as long as it executes “continued financial discipline.” According to a third-quarter earnings report, the runway had previously been expected to last about a year without the changes.

As for Apexigen, which was acquired in an all-stock transaction valued at around $10.7 million, Pyxis “has undertaken monetization efforts” for the company’s royalty streams. Sullivan and her team are also looking for partnerships for some of Apexigen’s programs that will not be advancing into the clinic under the Pyxis name, plus antibody and ADC platform technologies it has no use for that may bring in non-dilutive funding.

In announcing the acquisition, Pyxis said Apexigen’s antibody-generation platform would be complementary to its existing linkers, payloads and conjugation chemistries. The buyer also seemed excited about Apexigen’s sotigalimab, calling it “a potential best-in-class phase 2 CD40 agonist.”

But just over three months after the deal officially closed in August, it seems Pyxis is already offloading the very assets that made the Apexigen acquisition so attractive.

This is not the first time Pyxis has had to take a hard reality check and slim down its pipeline from five main candidates. Pyxis paused two programs, an anti-CD123 therapy called PYX-203 and the anti-KLRG1 med PYX-102, in August 2022. Now, the company plans to evaluate partnering opportunities for the two programs. Another asset was scrapped completely last summer as well.

Those moves left Pyxis with a runway extending into the second half of 2024.

Pyxis emerged onto the public markets in October 2021 at around $13 per share. The company's shares closed Tuesday at $1.66 apiece.