Halozyme to Cut 55% of Workforce Following Pancreatic Cancer Drug's Phase III Failure
Halozyme Therapeutics will halt development of a metastatic pancreatic cancer drug after it failed to demonstrate an improvement in overall survival in a Phase III trial. The company plans to implement an organizational restructuring as a result and slash its headcount by more than half.
This morning, San Diego-based Halozyme announced that its HALO-301 trial assessing PEGPH20 as a first-line therapy for the treatment of patients with metastatic pancreas cancer failed to reach the primary endpoint of overall survival. PEGPH20 failed to demonstrate an improvement in median overall survival compared to gemcitabine and nab-paclitaxel alone, 11.2 months versus 11.5 months, respectively, the company said. Helen Torley, president and chief executive officer of Halozyme, said the company will discontinue clinical development of PEGPH20 and its entire oncology operation and initiate the reorganization of the company to solely focus its operations on its Enhanze drug-delivery technology.
The Enhanze drug-delivery technology is based on the company’s patented recombinant human hyaluronidase enzyme (rHuPH20). By using rHuPH20, some biologics and compounds that are administered intravenously may instead be delivered subcutaneously. Enhanze may also benefit subcutaneous biologics by reducing the need for multiple injections.
As a result of the reorganization, Halozyme said it will terminate 55% of its headcount, approximately 160 positions. More than 80% of the roles are expected to be cut by January 2020. The company said the restructuring will result in savings of $130 to $140 million in 2020. Upon completion of the restructuring and after booking all related one-time charges, Halozyme anticipates becoming a sustainably profitable company beginning in the second quarter of 2020, the company said in its announcement.
As the company moves forward, Halozyme said the company will consist of about 120 employees who will focus on the growth of its Enhanze platform, particularly in areas of manufacturing, regulatory and product development, which are areas critical to supporting its partners. The company's Enhanze business continues to grow with three commercial products and 11 products currently in clinical trials. Halozyme said 12 employees will continue to promote the company’s commercial drug, Hylenex.
“Our mission now is to transition our strategy to focus on our high-growth, high-margin Enhanze drug delivery technology platform,” Torley said in a statement. She added that the company’s Enhanze business is well-positioned for growth due to the company’s strong partnership. Halozyme will provide a more detailed update for its Enhanze business during its third quarter financial results webcast and conference call.
“Halozyme now has a clear path to near-term, sustainable profitability with strong cash flows and high growth prospects,” Turley said.
Since the announcement, share priced for Halozyme have begun to slip in premarket trading. The stock is down nearly 2% to $15.30 per share.