Faltering Enumeral Biomedical Cuts R&D Staff, Alters Executive Compensation Deal

June 19, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Cambridge, Mass. – Only a month after reporting that it only had enough funds for operations into June 2017, Enumeral Biomedical (ENUM) has laid off its research-and-development staff.

At the end of May, Enumeral indicated that as of March 31, it had cash and cash equivalents of $1.4 million, about half of the $3.1 million it had at the end of 2016. Enumeral reported that if it couldn’t raise more money, it would have to lay off at least some of its 10-employee staff or “wind down its operations through liquidation, bankruptcy, or a sale of its assets.” Options being evaluated included debt financing, equity offerings or other non-disclosed strategic alternatives.

On June 2, the company filed a Prospectus Supplement with the U.S. Securities and Exchange Commission (SEC), that described job cuts and changes to the compensation packages for some of its directors and officers.

On June 9, 2017, it amended the separation letter agreement between itself and Arthur Tinkelenberg, its former president and chief executive officer. In the original Separation Agreement, Enumeral had agreed to make certain payments. With the amendment, Tinkelenberg “agreed to forego the remaining amounts of the severance payments due to him under the Separation Agreement, effective as of June 1, 2017. In addition, the Company agreed that all remaining unvested options to purchase shares of the Company’s common stock held by Dr. Tinkelenberg fully vest and become exercisable as of June 1, 2017. The Company also waived the non-competition restrictions on Dr. Tinkelenberg under the Separation Agreement.”

On the same date, June 9, it kicked off its restructuring plan that eliminated a “significant portion” of the company’s headcount, including its research and development operations.

Enumeral has struggled financially over the last year, according to the Boston Business Journal. But it was able to raise additional funds to continue operations. In December 2016, Enumeral completed a successful warrant tender offer for $3.4 million, which it stated would help the company meet its long-term growth plans.

The company is focused on developing drugs for cancer, autoimmune diseases and other diseases. Its current antibody discovery and development programs target checkpoint proteins PD-1, OX40 and Lag3. These antibodies, in addition to immuno-oncology applications, have implications for inflammatory, autoimmune and infectious disease indications.

In April, Enumeral inked a memorandum of understanding with the International Consortium on Anti-Virals (ICAV) to isolate and characterize high affinity, broadly neutralizing human antibodies against various pathogens. Under the deal, ICAV would provide patient samples and reagents for target screening, as well as critical functional screening. Enumeral would use its proprietary technology to identify the antibodies and manufacture enough for testing and candidate selection. Each group would cover its own costs.

“Rapidity of response is the key to containing infectious disease outbreaks and thus preventing them from becoming epidemic or pandemics,” said Jeremy Carver, president and chief executive officer of the ICAV, in a statement. “This collaboration will evaluate the contribution that Enumeral’s platform could make to significantly shorten the time taken to intervene in the next infectious disease outbreak with pandemic potential.”

At its first quarter financial report on May 22, the company said its revenue had decreased by $419,952 to $14,505 for the three months ended March 31, compared to $434,457 for the same period the year before. It attributed the decrease to its collaboration agreement with Merck and its grant from the National Cancer Institute (NCI). Its R&D expenses had already decreased by $323,928 to $1,146,115 for the period because of cuts in payroll and personnel expenses, as well as a decrease in stock-based compensation. However, that was offset by an increase in consulting costs.

The company was founded in 2009 and went public in 2014 via a reverse merger. It then raised $21.5 million, and later signed a research collaboration deal with Merck.