Months after going public, Apexigen lays off 55% of staff and considers exit routes

Where did it all go wrong for Apexigen? Seven months after going public via a SPAC merger, the Epitomics spinout is already culling half its workforce and looking for a potential buyer or other escape route.

In August last year, Apexigen hit the public markets via a merger with a special purpose acquisition company. At the time, the company touted emerging phase 2 data claiming to show a “significant opportunity” for its lead candidate, a CD40 agonist dubbed sotigalimab, in solid tumors.

Back in the summer, the biotech suggested sotigalimab’s potential could lie in combinations with PD-1 and other checkpoint inhibitors, cell therapies and even therapeutic cancer vaccines. In November, Apexigen decided to focus its energies on developing sotigalimab as a treatment for liposarcoma, after a phase 2 trial showed median progression-free survival of 12.45 months across the study’s 10 participants. Based on those results, the company planned to expand the trial to a further 10 patients.

Last month, the company revealed data at the ASCO Gastrointestinal Cancers Symposium showing that sotigalimab turned immunologically “cold” tumors “hot” by inducing significant inflammatory responses in the tumor microenvironment in patients with esophageal/gastro-esophageal junction cancer.

The data did little to revive Apexigen’s slumping stock price, which after debuting at $10 in August, sunk to below $3 within a month. The company’s shares currently sit at around $1.30 apiece.

Now, the biotech has enlisted Ladenburg Thalmann & Co. Inc. to explore a possible acquisition, company sale, merger, divestiture of assets, licensing deal or another strategic transaction. Alongside this, the company is implementing a corporate restructuring, including laying off 55% of its workforce, with the aim of extending its cash runway.

“While it was a difficult but prudent decision to reduce our workforce to focus on critical areas as we conduct this comprehensive review of strategic alternatives, we strongly believe this process will maximize stockholder value and the likelihood of sotigalimab’s successful development,” CEO Xiaodong Yang, M.D., Ph.D., said in the release.

The biotech had $20.7 million in cash and equivalents as of the end of September, which it expected to last into the second quarter of 2023. Since then, the company has sold $2.8 million worth of shares, with the proceeds used to fund the phase 2 study of sotigalimab in combination with doxorubicin for liposarcoma.