Rani and Sangamo jettison staff, offices and assets to keep businesses afloat next year

Rani Therapeutics and Sangamo Therapeutics have become the latest biotechs to significantly shrink their workforces in order to eke out cash to survive another year.

California-based Rani will lose a quarter of employees as part of a package of measures to extend its cash runway long enough to see top-line results for a phase 2 trial of a teriparatide-containing pill for osteoporosis called RT-102 alongside a phase 1 study of RT-111, a biosimilar of Johnson & Johnson’s Crohn's disease drug Stelara.

As well as letting go of 25% of its workforce, Rani will halt work on the neuroendocrine tumor pill RT-101. The biotech is also pausing work on two candidates in preclinical development: a TNF-α inhibitor antibody for the treatment of psoriatic arthritis called RT-105 and RT-110 for hypoparathyroidism.

“While we are discontinuing our RT-101 program, we aim to continue to develop RT-105 and RT-110 when we have the appropriate resources to do so,” CEO Talat Imran explained in a third-quarter earnings release.

Rani ended September with $60.5 million in cash and equivalents, with today’s cutbacks expected to extend the company’s resources into 2025.

While fellow California biotech Sangamo has more cash to play with—ending September with $132.1 million—the genomics medicines company is facing similar challenges. Not only has Sangamo now decided to lay off 162 employees, equivalent to 40% of its U.S. workforce, the biotech's headquarters in Brisbane will close while it decamps to another California facility in Richmond by the end of the year.

There will be a few empty chairs in the relocated C-suite, however. As part of the restructuring, Chief Operating Officer D. Mark McClung and Chief Scientific Officer Jason Fontenot, Ph.D., will both be heading for the exits.

“The restructuring announced today represents a further step towards simplifying the Sangamo organization and focusing on our epigenetic regulation therapies treating neurological diseases and our novel AAV capsid delivery technologies,” the biotech explained in its third-quarter earnings release. “Sangamo is deferring new investments in its Fabry and CAR-Treg programs beyond what is currently committed and is actively seeking collaboration partners or direct investors in both.”

“At the same time, we will continue to progress our promising epigenetic regulation programs for neurological diseases and hope to soon share a breakthrough in our capsid delivery capabilities, which we believe could open the door for many other high-value and unmet diseases to be addressed with our editing capabilities,” CEO Sandy Macrae, Ph.D., said.

The sum total of these radical changes should be to cut operating expenses in half—from the $240 million to $260 million ballpark figure likely to be spent across 2023 to the more affordable $115 million to $135 million range. It means the company expects to keep the lights on at its rechristened headquarters into the third quarter of 2024.

This marks the second wave of layoffs at the company this year, following the loss of 120 employees—equivalent to 27% of the biotech’s U.S. workforce at the time—back in May. That retrenchment saw Sangamo focus on its neurology epigenetic regulation portfolio as well as the Fabry disease asset and CAR-Treg that were both culled this week. It followed the company’s move to shelve the late-stage development of a sickle cell disease drug in February—a year after Sanofi handed back the asset.