Kezar loses 41% of staff, CEO to keep lead lupus candidate on the road to phase 2 readout

Kezar Life Sciences is significantly reducing both its workforce and its pipeline to eke out cash over the two years until its lead lupus drug reads out more phase 2 data.

The “strategic restructuring program” will see the South San Francisco-based biotech wave goodbye to 41% of its employees including Chief Medical Officer Noreen Henig, M.D., and CEO John Fowler, who will leave the company Oct. 6 and Nov. 7., respectively.

Christopher Kirk, Ph.D., a co-founder of Kezar who served as president and chief scientific officer until April this year, will take on the CEO role, while Zung To, senior vice president of clinical development operations, will have responsibility for clinical trials and drug development operations.

The restructuring of Kezar’s pipeline is every bit as far-reaching as the personnel changes. All R&D activities have been paused indefinitely, and the biotech is hoping to find licensing partners for its protein secretion platform and preclinical programs.

Work will continue on KZR-261, the first candidate developed from the platform, with initial phase 1 data in solid tumors expected next year and top-line data from a phase 2a trial in autoimmune hepatitis due in mid-2025. But even when it comes to that tumor trial, the company expects “to reduce the number of planned expansion cohorts to conserve cash resources while it continues to evaluate safety and biologic activity.”

The end goal is to conserve enough cash to ensure Kezar’s lead asset, a selective immunoproteasome inhibitor called zetomipzomib, makes it to a readout of the phase 2b PALIZADE trial in lupus nephritis. The company ended June with $236.6 million in cash and equivalents.

“These difficult but necessary decisions to streamline our operations and align resources around our clinical programs should put us on a path to long-term success, extending our runway past key data points, particularly the readout for our PALIZADE trial,” outgoing CEO Fowler said in the postmarket release Oct. 3.

His replacement, Kirk, said he was “very excited to be returning to Kezar as CEO to lead us through this next chapter as we focus on the zetomipzomib and KZR-261 clinical programs.”

Kezar has previously pitched zetomipzomib as a pipeline in a drug in the belief that inhibiting the immunoproteasome offers a way to go beyond treating inflammatory diseases one cell or cytokine at a time. While AbbVie's Humira acts on TNF-alpha and Roche's Actemra acts on IL-6, for example, through the cells and cytokines relevant to inflammatory diseases, Kezar sees zetomipzomib as a way to target the various cells and cytokines through a single molecule.

Those ambitions were briefly derailed in May 2022 when a failure to beat placebo in a midphase trial against two rare autoimmune diseases sent the company's stock spiraling down. Hope—and the share price—was restored the following month when the drug hit its target in a phase 2 study in lupus nephritis.

Kezar isn’t the only one to see promise in zetomipzomib, with Everest Medicines securing the Asia rights for the drug in that same indication for $132.5 million in biobucks a couple of weeks ago.

William Blair analysts branded yesterday’s restructuring announcement a “prudent decision given investors’ concerns about the ability of the company to complete the PALIZADE trial.”

“While it has clearly been a difficult year for Kezar, we remain positive on the profile of zetomipzomib and potential of the drug in lupus nephritis,” analyst Matt Phipps said in a Oct. 4 note.