French biotech Transgene is planning to slash its payroll and redouble its focus on clinical development, moving on from a costly snub at the hands of Novartis ($NVS).
The company will let go of about 120 employees as it steps away from vertical integration, cutting its losses in development and manufacturing with the goal of leaning on contractors to fill the void. With the resulting savings, Transgene plans to focus on R&D, investing in its pipeline of mid-stage treatments and laying out funds for translational research, the company said.
Transgene is also using the opportunity to rethink its approach to developing drugs, according to management, looking more to collaborations with academia and biopharma partners and vowing to consider deals at earlier stages of the process.
The change, which sent Transgene's shares down about 14%, comes about a year after ex-partner Novartis decided against opting in on TG4010, a Phase II vaccine targeting lung cancer. The Swiss drugmaker's decision nixed an agreement worth as much as $800 million, deflating Transgene's market value in the process. The biotech has since promised to go it alone on a Phase III trial for TG4010 but is yet to begin enrollment.
Transgene has stressed that it will do everything it can to find new jobs for the employees affected by its latest cuts, working with top shareholder Institut Mérieux to place them. The company is "committed to by all means minimizing as much as possible the social impact of the restructuring plan," management said in a statement, and the goal "is to leave no one without a solution."
Meanwhile, Transgene and partner SillaJen are blueprinting a Phase III trial for Pexa-Vec, a vaccine for liver cancer that missed its main goal in Phase IIb. The partners got the FDA's sign-off on their proposed study design in April and plan to enroll about 600 patients later this year. Transgene is also at work on earlier stage therapies for HPV-induced cancers, solid tumors, hepatitis B and tuberculosis.
- read the statement (PDF)