Following a shake-up at the top, OncoSec Medical is now reducing its workforce by almost half as it tightens its focus on its lead melanoma trial of its only clinical-stage candidate.
Between December 2019 and April 2022, the biotech saw a new CEO, chief financial officer and chair of the board of directors join the company to replace a wave of high-level resignations. Now, the disruption has spread to the rest of the workforce.
In a bid to reduce operational expenses and extend its cash runway, the company is laying off 45% of its employees—18 people in total. What remains of OncoSec’s workforce will focus on getting the company’s lead asset, Tavo, toward near-term data milestones in the KEYNOTE-695 phase 2 trial. The study is testing the therapy in combination with Merck’s Keytruda for melanoma.
A top-line readout of the trial's secondary endpoint of objective response rate is expected in the fourth quarter of this year, with the primary endpoint of overall response rate due to read out in the first quarter of 2023, the company said.
Tavo is a DNA-plasmid interleukin-12 (IL-12) therapy designed to be delivered into a tumor using the company’s electroporation device. OncoSec signed an initial collaboration and supply agreement with Merck in 2017 to study a Tavo-Keytruda combination in the KEYNOTE-695 trial before expanding the partnership in 2018 to encompass triple-negative breast cancer with the KEYNOTE-890 study and then the phase 3 KEYNOTE-C87 trial in melanoma last year. It appears the company is now hanging all its hopes on the original melanoma trial.
In a Securities and Exchange Commission filing, the company said it expects the restructuring plan will be complete by the second quarter of 2023. The company had $19.5 million in cash and equivalents as of the end of April, a drop from almost $46 million a year ago.
The layoffs were “unfortunate” but “necessary,” said OncoSec CEO Robert Arch, Ph.D., in an Oct. 4 release. He joined the company in April 2022 following the departure of interim CEO Brian Leuthner in August 2021.
“Since joining as CEO my focus has been on reviewing all aspects of our technology and pipeline,” Arch noted. “This led to the conclusion that an operational restructuring and strategic pipeline refocus is the best course of action to accelerate advancing TAVO-EP and preparing for the completion and data readout of our Keynote-695 trial.”