More biotechs hit the wall as Rubius lays off 82% of staff and Tricida seeks a sale

Biotechs announcing strategic reviews has become a depressingly common sign in these straightened times, and that’s certainly the case for Rubius Therapeutics and Tricida.

For cancer and autoimmune-focused Rubius, the conclusions of the review are already being implemented—at the expense of 82% of its workforce. The remaining employees will oversee the search for a sale or merger, with the process to be headed up by an investment bank.

CEO Pablo Cagnoni and Chief Financial Officer Pepe Carmona will be among those heading for the exits, with current Chief Operating Officer Dannielle Appelhans taking over as CEO Nov. 15, the company said in a release Thursday morning.

The latest shake-up at the Massachusetts-based company comes just two months after Rubius tore up its previous strategy, dumping its two clinical candidates after reviewing data and announcing a 75% layoff across the business. Rubius had 213 employees as of July, down from 269 at the end of January, meaning about 160 people were set to lose their jobs in September.

Rubius went public in 2018 with a $277 million IPO to fund development of therapies based on biologically engineered red blood cells. The plan was to pursue selective, potent and ready-to-use cellular therapies for rare diseases, cancer and autoimmune diseases. Yet the strategy has unraveled slowly over the years, culminating in Rubius’ decision to rip it up and start again using a new cell conjugation platform.

When it comes to Tricida’s future, the details have yet to be finalized, but the mood music isn’t much cheerier. The biotech—which is focused on its late-stage chronic kidney disease therapy veverimer—said it was mulling ways to “reduce operating expenses,” with more details to come later this month.

The company has also tapped Stifel to serve as an investment banking adviser and SierraConstellation Partners LLC to serve as a financial adviser for a review that may span a sale of the company itself or its assets. In a postmarket release yesterday, Tricida didn’t sound optimistic about its options, admitting that “there can be no assurance that a transaction would occur in a timely manner, if at all, or that a transaction would be completed on attractive terms.”

The writing was on the wall for Tricida last week when a phase 3 failure ended hopes of getting veverimer to market two years after the FDA first denied approval. In the VALOR-CKD trial, Tricida’s sole asset didn’t meet the primary endpoint, which measured how much time it took for a patient to experience either renal death, end-stage renal disease or at least a 40% reduction in estimated glomerular filtration rate.

The announcements from Rubius and Tricida came just hours after Surface Oncology said it would cut a fifth of its workforce and froze work on one of its anti-tumor antibodies.