NightHawk dives into CDMO business, leaving R&D staffers in the lurch

NightHawk Biosciences, a biotech that was developing medical countermeasures to defend against emerging biothreats, is officially dropping R&D and sending associated staff out the door to fully focus on its CDMO wing.

The board of directors has officially approved a “refocus and restructuring plan,” NightHawk said in a Tuesday SEC filing. The biotech plans to shed its noncore assets and reduce operating costs to focus instead on Scorpius Biomanufacturing, a San Antonio-based CDMO that specializes in mammalian, microbial, and cell- and gene-based therapies.

This unit of the company is revenue generating, with $700,000 reported for the second quarter that was attributed to the CDMO work. R&D, meanwhile, cost the company $5.7 million for the same quarter, even after a handful of assets were deprioritized in November 2022.

Along with the new focus, 13 people have lost their jobs from the R&D team, representing 14% of the company’s current workforce. The layoffs will be completed immediately with expenses of $200,000 to $300,000 to be incurred in the third quarter, according to the regulatory filing. The expenses include severance, employee medical benefits and continuation of salaries and benefits for six weeks. NightHawk expects the layoffs to save $1.8 million annually in compensation.

The writing was on the wall for NightHawk in November 2022, when the biotech cut its oncology programs. Development of the off-the-shelf cell-based immunotherapy HS-110 and immunomodulatory antibody PTX-35 was halted as the company prioritized the CDMO and medical countermeasures to biothreats.

At the second quarter update in August, NightHawk CEO Jeff Wolf said his team was “evaluating a variety of strategic options to advance” the CDMO operations in San Antonio. But R&D activities were still underway and he was “highly encouraged by the latest preclinical data.” Wolf said the goal was to develop the countermeasure therapies through key milestones but then license or partner them out.

Besides the Scorpius unit, NightHawk has two other subsidiaries: Elusys, which develops and commercializes the anthrax antitoxin Anthim; and Skunkworx Bio, a drug discovery biotech that was using “pocket biologics” to find new disease targets.

NightHawk partnered with Lytic Solutions last summer to develop an mpox vaccine.