UPDATE: Magenta cuts 14% of staff, trims R&D amid tumultuous biotech markets

Magenta Therapeutics is trimming around the edges, cutting 14% of staff and axing a planned dosing optimization trial for a stem cell mobilization med, all in a bid to extend its cash runway to the second quarter of 2024. 

The cost-saving measures announced Thursday are focused on shaving administrative expenses and new research investments, including the company’s planned dosing and administration optimization trial for the stem cell med, MGTA-145, in healthy patients. The company had been releasing updates on that trial as recently as a month ago, with the expectation that data would be available in the second half of 2022.

Instead, Magenta is rallying behind MGTA-117, the lead asset in the company’s targeted conditioning program. The objective of the program is to develop a conditioning regimen that maintains the efficacy of newly infused stem cells without the high toxicity of chemotherapy or radiation treatments to deplete the originals. Magenta’s med is relying on antibody-drug conjugates to target the CD117 receptor, which is highly expressed on hematopoietic stem cells and leukemia cells to selectively deplete stem cells prior to transplant.

In an interview, Magenta CFO and COO Steve Mahoney said that the reductions were made as a result of the public biotech market and wanting to focus on the MGTA-117 program. Like many public biotechs, Magenta has tumbled in the last year, with shares dropping more than $8.50 down to $2.40.

"This is capital market-driven, the uncertainty of the markets and the fact that we're feeling positive about the Magenta 117 study," he said. "The combination of those two is the biggest driver." 

So far, “multiple patients” have been dosed in a phase 1/2 trial of the treatment for relapsed/refractory acute myeloid leukemia and myelodysplasia-excess blasts. Although the first patient was dosed just more than a month ago, the company is already hinting at success, saying that a preliminary review suggests, “early signals of positive pharmacodynamic activity and that MGTA-117 has been well-tolerated.” But of course, there’s a ways to go. 

Magenta teased “a summary of clinical observations from these initial patients with respect to CD117 target binding, drug clearance, cell depletion and tolerability" would be presented during its upcoming May first-quarter 2022 earnings report. The company had previously reported that data from the trial were expected “this year.”

"You want to reassure the world that we haven't seen the safety signals that would be concerning," Mahoney said when asked about the rationale for teasing early data. 

For Magenta, just launching this trial was a notable step forward, given that plans sat idle for two months in 2021 during a clinical hold slapped on the study by the FDA. The agency had requested that the company use an additional test to inform dose-escalation decisions. That hold was lifted in September 2021 and Mahoney said it had no impact on the cost-cutting measures announced Thursday. 

In addition to axing the dose optimization trial for MTGA-145, the company also said that it would be ending “research platform-related investments in new disease targets.” Magenta originally had three other programs underway for MTGA-145, but two of them were previously paused in favor of the dose-escalation study.

With the escalation study now on hold, those two programs, one studying MTGA-145 as an autologous transplant for multiple myeloma and the other as an allogeneic transplant for leukemia, are in limbo. The company is instead focusing this asset on sickle cell disease through a partnership with bluebird bio. Mahoney is hopeful that all three studies could resume should available capital open up.

"If you can help patients, then the capital will follow and we can broaden those efforts out," he said. 

Although Magenta noted administrative costs as a source of savings, those costs have already been on the decline. According to the company’s full-year earnings report, administrative costs dropped by more than $100,000 from 2020 to 2021. Research and development costs also declined by almost $4 million year-to-year. According to the company's annual report, there were 75 full-time employees as of the end of 2021, meaning the job losses affected roughly 11 employees. Mahoney said departing team members were notified about the cuts this week. 

Editor's note: This article was updated with additional commentary following an interview with Magenta CFO and COO Steve Mahoney at 2:50 p.m. ET on April 14, 2022.