Bay Area’s Five Prime Slashes 70 Jobs in Second Restructuring of 2019
Five Prime Therapeutics, Inc. will eliminate 70 jobs as the company undergoes a restructuring to extend its cash runway. Five Prime said the restructuring plan will save an estimated $20 million in annualized cost savings.
Immuno-oncology focused-Five Prime said it will retain a small research team as it remains focused on advancing its three late-stage research assets through the clinic and, potentially to commercialization. Five Prime will increasingly rely on outsourcing and contracted capabilities, the company said late Thursday.
William Ring, chairman of the board and interim chief executive officer, said when he took over the reins of the company last month after the former CEO abruptly departed, that his immediate focus was to conduct a review of the company’s operations with a goal of “ensuring long-term sustainability and value creation.” The restructuring announced Thursday afternoon will provide the cash resources to “prioritize future pipeline investments based on clinical data readouts in 2020,” he said. Ringo added that the restructuring will allow the company to evaluate its long-term pipeline growth strategies as well.
Five Prime currently has five different programs in the clinic, with bemarituzumab being its most advanced asset. Bemarituzumab, a first-in-class isoform-selective antibody with enhanced antibody-dependent cell-mediated cytotoxicity (ADCC) is in Phase III development as a targeted immunotherapy for tumors that overexpress FGFR2b. In August, when Five Prime announced its second quarterly report of the year, the company said it plans to conduct an early futility analysis for the FIGHT trial during the first half of 2020. The purpose of the futility analysis is to ensure the trial is adequately powered to detect an overall survival benefit at full enrollment, the company said.
Under the restructuring plan, 70 jobs will be eliminated across all company functions. Of those, 70% will be eliminated by the end of the year, with the rest eliminated in 2020. In another cost-savings measure, Five Prime said it will reduce its corporate facilities footprint by subletting a significant amount of its leased building, or moving to a smaller facility while subletting its entire building.
South San Francisco-based Five Prime estimates that it will incur approximately $3 million of pre-tax charges for severance and other costs related to the restructuring, primarily in 2019. The company is reaffirming its financial guidance and anticipates ending 2019 with $148 to $153 million in cash, cash equivalents and marketable securities.
This is the second job cut at Five Prime this year. In January, the company eliminated 41 positions, about 20% of its staff, in a restructuring. At that time, the majority of the positions cut were in the areas of research, pathology and manufacturing. Five Prime said in January that the cuts were expected to result in a $10 million decrease in net cash for operations.