On the Bubble, Yumanity Announces Layoffs of 60% of Staff
Yumanity Therapeutics, a Boston-based clinical-stage biopharmaceutical company, announced major structural changes Thursday. In addition to massive layoffs – around 60% of its workforce – the company also said it is considering “strategic alternatives” to its financial woes, including the possibility of selling or merging.
Yumanity had a promising start. Founded in 2014, the company is focused on the discovery and development of treatments for neurodegenerative diseases such as Parkinson’s, Alzheimer’s, Lewy body dementia and amyotrophic lateral sclerosis (ALS). Immediately, big biopharma players like Biogen and investors like Sanofi-Genzyme BioVentures saw potential in Yumanity’s yeast-based treatments for these diseases.
By 2020, the company’s founders—Tony Coles, Susan Lindquist and Ken Rhodes, all of whom had successful track records at their previous jobs - had led Yumanity to some major milestones. The company struck a partnership with Merck & Co. and completed a reverse merger with Proteostasis Therapeutics. After a successful Phase Ib clinical trial of its lead candidate for Parkinson’s disease in November 2021, Yumanity was awarded a $500,000 grant by the Michael J. Fox Foundation for more research in Parkinson’s.
But underneath, the company was struggling. Despite successful clinical trials, the Q3 2021 reports showed a $10 million net loss, compared to a net loss of $6.4 million the previous year. By December 2021, it was offering inducement grants of non-statutory stock options for purchase. By February 17, shares of the company had dropped 12% with prices now about $1.55 as of print time.
Clinical development issues also soon arose. The aforementioned clinical trial in Parkinson’s—for which Yumanity had already submitted an Investigational New Drug Application to the U.S. Food and Drug Administration - was put on partial hold in January 2022.
Apparently, pressures bottled up and have now exploded with the major restructure and layoffs. Yumanity is laying off around 26 of its 44 employees in a process that will be complete by April. The company also announced that it is exploring “strategic restructuring” options to preserve capital, including changes that will help reduce expenses while it considers its options. Yumanity said it expects the restructuring process to cost about $400 000. And the long-term solutions? The Board of Directors said that lots of options are on the table: acquisitions, mergers, reverse mergers, sales of assets, sales of product licenses and more.
As the process moves forward, the company appears wary of sharing too much information. Yumanity said it does not expect to disclose developments unless the Board of Directors decides to do so. Yumanity also noted that the possibility of strategic alternatives such as sales or mergers has no guarantee of being successful.
This news is dismal for the more than 50 million people worldwide who suffer from neurodegenerative diseases and are hoping for cures. Unfortunately, Yumanity is not the only company to be struggling with potential layoffs and restructuring. Over the past five months, Biogen, vTv, Lundbeck, Esperion, Ardelyx and Ziopharm have also experienced or been rumored to be considering significant layoffs.