Exicure Lays off Two-Thirds of Workforce, Suspends R&D in Restructuring
Shares of Exicure, Inc. are falling after the company announced a strategic initiative that casts doubts on its future developmental programs.
Exicure secured a $5.4 million equity investment that will keep the company afloat as it initiates a restructuring that includes a massive reduction in headcount, suspension of R&D activities and plans to divest its neuropathic pain assets.
This restructuring is expected to extend Exicure’s cash runway into the second quarter of 2023 based on current operating plans and estimates.
Exicure will slash 66% of its workforce. The job cuts are expected to be completed in the fourth quarter of this year, the company announced. Its executive team is expected to remain in place following the restructuring and realignment.
Additionally, Exicure will implement other cost-saving initiatives as it looks to divest its SCN9A program. The company's SCN9A program targets the Nav 1.7 channel for neuropathic pain.
While multiple candidates have shown promising activity in preclinical studies, those assets have not panned out as the company hoped. Exicure noted that results from a recent in-vivo animal study in non-human primates failed to generate the “desired target engagement levels” that were previously seen in in-vitro clinical studies.
In its announcement, Exicure said additional preclinical studies are required in order to understand those findings. That would delay the timing of potential filing of Investigational New Drug applications. With this in mind, Exicure halted further pre-clinical studies in the SCN9A program and will assess strategic alternatives for all of its assets, including platform technology.
The company has also suspended ongoing programs with its partners, including Ipsen and AbbVie. Last year, Ipsen and Exicure entered into a partnership valued at more than $1 billion to develop spherical nucleic acids for the treatment of Angelman syndrome and Huntington's disease. In 2019, AbbVie and Exicure partnered in the discovery of potential SNA-based treatments for hair loss disorders.
CEO Matthias Schroff expressed disappointment at the massive job cuts.
In a statement, Schroff said the decision was not easy and “is in no way a reflection” on the employees.
“I am so proud and honored to be their colleague at Exicure as I have seen firsthand their tremendous efforts, sacrifices and contributions in following the science, being true to the data and ultimately pursuing treatments in patients with unmet medical needs. Exicure will support them in transitioning to their future endeavors,” Schroff said in a prepared statement.
Karen Sharma, a media representative for Exicure, declined comment.
The $5.4 million equity investment was made by CBI USA, Inc., which also led a $5 million private placement earlier this year. With this investment, Exicure announced CBI gained a controlling stake in the company.
With a 50.4% interest in Exicure, CBI now has the right to nominate new directors to the company’s board.
Earlier this year, there was a significant leadership turnover at Exicure.
Schroff, the former chief scientific officer, took over the reins as CEO. Additionally, there was turnover on the board of directors with multiple resignations.