Signs of Trouble Emerge as Sio Gene Halts UMass Gangliosidosis Deal
Sio Gene Therapies has terminated its licensing deal with the University of Massachusetts to develop and commercialize two gene therapy product candidates in order to focus on other more potentially profitable projects.
The company has given the required notice to the University to inform the latter of the decision to stop clinical trials and manufacturing operations related to AXO-AAV-GM1 and AXO-AAV-GM2, which are being explored for GM1 gangliosidoses and GM2 gangliosidoses (including Tay-Sachs disease and Sandhoff disease).
"We are exploring strategic options that may more effectively maximize shareholder value and, as a result, we are also implementing a significant headcount reduction to conserve capital. We will support our study investigators as they complete ongoing clinical activities and continue supplying study drugs to patients during the notice period," Sio CEO David Nassif said in a statement.
Sio shares dropped 24.88% to $0.45 per share on the NASDAQ following the announcement. The company said that apart from conducting a review of strategic moves for the firm, it is considering merger or sale opportunities. Nothing definite was shared as of this writing.
"The Company will explore options such as the potential for a company sale, merger, business combination, or other transactions designed to maximize shareholder value. SVB Securities will act as Sio's financial advisor with respect to the strategic review process," the firm said.
The decision to halt the partnership with the University of Massachusetts comes just two months after Sio terminated its licensing agreement with Oxford Biomedica for the development of AXO-Lenti-PD, the lentiviral gene therapy project for Parkinson's disease. The move effectively extended the firm's cash runway into the second half of 2023.
Along with that announcement, Sio named Nassif as its interim chief executive officer, which he assumed in addition to his role as chief financial officer and general counsel. Nassif replaced Dr. Pavan Cheruvu, M.D., who left to "pursue new opportunities."
Financial results for the nine months from December 31, 2021, revealed massive expenses amounting to $40.8 million (from just $16.7 million in the same period in 2020), primarily due to increased AVO-AAV-GM1, AVO-AAV-GM2, and AXO-Lenti-PD program spending.
The increased employee headcount to support these three programs also contributed to the rise in expenses. Overall, for the said nine months in 2021, Sio logged a net loss of $58.6 million, up from a net loss of $29.1 million in the previous year.