OncoGenex slashes 27% of its payroll as its pipeline promise fades

OncoGenex CEO Scott Cormack

Bothell, WA-based biotech OncoGenex ($OGXI) is laying off nearly a third of its workforce to conserve cash as it holds out hope for its lead cancer program in a move designed to keep the doors open until Phase III results come in.

The company is shedding 27% of its payroll--about 11 jobs--and cutting expenses not related to clinical development, slimming down to extend its cash runway into the third quarter of 2017, management said. OncoGenex disclosed $55.2 million in cash and equivalents at the end of last year, which the company said is enough to see through a late-stage effort for its lead cancer drug.

The treatment, custirsen, is in the midst of two Phase III trials in prostate and lung cancers. The first, testing custirsen with cabazitaxel as a second-line therapy in castration-resistant prostate cancer, will wrap up in the third quarter of this year, OncoGenex said. The second, pairing custirsen with docetaxel in patients with non-small cell lung cancer, is slated to generate final survival data in the first half of 2017, according to the company.

But many investors have already soured on custirsen's potential in prostate cancer. In December, OncoGenex disclosed that, in an early glimpse at subpopulation data from the ongoing Phase III trial, patients in the treatment arm didn't show improvement in overall survival. The company remains blinded to full trial data, but the peek at results sent its share price down by more than 55%.

Teva ($TEVA) abandoned custirsen in April, months after the drug flopped in an earlier Phase III trial in prostate cancer. OncoGenex has been cutting its costs ever since, reducing the size of custirsen's late-stage lung cancer study and nixing a lease agreement on its headquarters to save money.

OncoGenex's second pipeline asset, apatorsen, missed the mark in a Phase II lung cancer trial last month and is now in the midst of an investigator-sponsored study in bladder cancer with results expected this year, the company said.

- read the statement

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