In Second Pipeline Pivot, Axcella Axes 85% of Staff

Layoffs

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In a strategic reorganization announced Thursday, Axcella Therapeutics will focus its resources on its Long COVID program and slash headcount by 85%.

Meanwhile, the Cambridge, Mass.-based biotech will step away from non-alcoholic steatohepatitis, discontinuing the Phase IIb trial of its endogenous metabolic modulator AXA1125. However, Axcella isn’t closing the door on NASH completely, stating it retains the option to restart this program should resource availability change in the future.

Bob Crane, chief financial officer and Virginia Dean, chief people officer, will depart the company as part of the strategic realignment.

In a statement Thursday, Axcella CEO Bill Hinshaw said the new strategy will not only provide the best support for the company’s Long COVID program but also “best position us to derive value from our platform technology.”

Hinshaw added that Axcella is also currently “in active and accelerating business development discussions, and [is] exploring creative collaborations” to continue advancing its platform and corresponding programs.

The company has already reached an agreement with SLR Investment Corp, a business development firm, to reduce an outstanding loan from a previous agreement.

Thursday’s pipeline refocus is Axcella’s second this year, after a similar move was announced in May. At the time, the company had just lost its president of research and development Alison Schecter, who resigned to pursue other opportunities, and board member Shreeram Aradhye, who reportedly left for personal reasons.

Amid the leadership shuffle, Axcella suspended its program in overt hepatic encephalopathy to focus on developing its NASH and Long COVID assets.

And Then There was One

Axcella’s last remaining program, AXA1125 for Long COVID, is an endogenous metabolic modulator (EMM). It works by bringing together several amino acids and their derivatives, in distinct ratios, to alter various metabolic pathways related to the disease.

In particular, AXA1125 could potentially reverse mitochondrial dysfunction, a key driver of long COVID, as well as reduce inflammation and restore cell homeostasis.

In August, the company unveiled topline results from a Phase IIa study of AXA1125. Patients who were given the drug saw statistically significant improvements in mental and physical fatigue as compared with placebo counterparts.

Moreover, there was a significant correlation between fatigue improvement and better results on the 6-minute walk test in patients treated with AXA1125. This interaction was not detected in the placebo group.

In Thursday’s announcement, Hinshaw noted Axcella is “in active conversations with regulators in both the U.S. and Europe,” in hopes of starting a registrational trial for AXA1125 in Long COVID fatigue, “a disease that currently has no treatment options.”

AXA1125 was also being developed for NASH and despite being discontinued, the program returned positive results in a Phase IIb clinical trial. In September, a pre-planned interim analysis showed significant improvements in liver stiffness measurement, as compared with placebo. Non-invasive measures of liver fat and stiffness also improved after AXA1125 treatment.

Aside from AXA1125, Axcella also owns AXA1165, another EMM. This asset was being assessed in a Phase II study for overt hepatic encephalopathy before development was suspended.

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