Beleaguered Regulus Therapeutics Slashes 60 Percent of Workforce in New Corporate Restructuring

Shares of Regulus Therapeutics saw something of a slight rally on Monday following a post-Independence Day corporate restructuring announcement that included the termination of 60 percent of its workforce, which caused a massive stock plummet.

La Jolla, Calif.-based Regulus announced a restructuring that included the termination of 60 percent of its employees, as well as the suspension of a Phase I clinical trial following unexpected toxicity observations. Additionally, Regulus said it has paused patient recruiting for its Alport syndrome treatment RG-102, which it is co-developing with Sanofi. Regulus said it needs to restructure its relationship with the French company as part of its cash-savings strategy.

By taking on these aggressive and drastic steps, Regulus said it expects more than $20 million in annualized savings, which will extend its cash runway into the middle of 2019. News of the restructuring sent shares plummeting on July 5. Shares were trading at 37 cents on Monday.

For more than a year Regulus has endured a number of difficulties, including AstraZeneca pulling the plug on its involvement with the company’s clinical development program for the treatment of non-alcoholic steatohepatitis (NASH). Also last year, in May 2017, the company slashed 30 percent of its employees Regulus terminated 30 percent of its workforce, and also saw the loss of its former Chief Executive Officer Paul C. Grint. He was replaced at the helm by Jay Hagan.

Now the woes continue for the company. Not only is it doing what it can to extend its cash flow, the company continues to be beset by regulatory problems. Grint resigned following an ongoing hold on its hepatitis C program RG-101, a GalNAc-conjugated anti-miR targeting microRNA-122.

The Phase I program Regulus suspended it the multiple ascending dose study for RGLS4326 and will initiate a new study given some unfavorable toxicity issues it observed. Regulus first initiated the study in May for the treatment of autosomal dominant polycystic kidney disease (ADPKD). However, in its July 5 announcement, the company said there were “unexpected observations in its 27-week mouse chronic toxicity study.” The study was designed to support the Phase II proof-of-concept study in ADPKD the company planned to start in mid-2019. Regulus said the observations in the mouse chronic study were a shock, given the “favorable safety profile of RGLS4326 in previous non-GLP and GLP toxicity studies at the same or similar doses” the company used to support is Investigational New Drug Application and the Phase I study. After a consultation with the U.S. Food and Drug Administration, Regulus said it will initiate investigative studies and plans another 27-week mouse chronic toxicity study with changed protocols that are believed to address the unexpected findings. A 40-week non-human primate chronic toxicity study continues with no significant findings to date, the company said.

Regarding the Alport syndrome treatment, Regulus said preliminary results from its RG-012 study are encouraging. The company said that the kidney tissue concentrations achieved in the preliminary results would be predictive of therapeutic benefit based on animal disease models. In addition, modulation of the target, miR-21, was observed. 

Regulus said it will continue to advance its preclinical research targeting HBV, as those programs “represent the most attractive opportunity” for investment. Targeting host factors with GalNAc-conjugated oligonucleotides directed to the liver represents a potentially attractive approach to treating the disease, Regulus said. The company added that it has identified multiple microRNA targets that serve as host factors for the virus. Regulus said it has already demonstrated human proof-of-concept with the approach in its hepatitis C program. Regulus plans to file an IND for the HBV program in the second half of 2019.

“In the near-term, we will concentrate our efforts on investigating the unexpected mouse toxicity findings in our RGLS4326 program, advancing our HBV programs, and looking for additional ways to improve shareholder value,” Hagan said.

Additionally, Regulus will seek to partner the balance of its preclinical programs, which include glioblastoma multiforme, NASH and immunology.