SQZ Culls 60% of Workforce as Founder & CEO Steps Down

Pink Slip Layoff

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SQZ Biotechnologies is slashing 60% of its workforce and looking for a new CEO after initiating a strategic prioritization to focus on its cell therapy platform for solid tumors.

The Watertown, Mass.-based company announced the new research focus will center on its second-generation enhanced Antigen Presenting Cells (eAPC) cell therapy program. The eAPC platform is aimed at HPV16-positive recurrent, locally advanced or metastatic solid tumors.

Included in its prioritization of the eAPC program, SQZ is also reducing its workforce by approximately 60%. The company noted the expenses from the layoffs are expected to cost about $5 million.

Among those departing are Founder and Chief Executive Officer Armon Sharei and Chief Financial Officer Micah Zajic. Zajic only moved into the CFO role a few months ago. He had previously served as chief business officer.

Taking over as interim CEO is Howard Bernstein, the company’s former chief scientific officer. Earlier this year, Bernstein moved into a director’s position on the company's board. His CSO duties have been divvied up among three employees, Ipsita Roymoulik, head of chemistry manufacturing and controls; Scott Loughhead, vice president of translational research; and Maisam Dadgar, head of engineering.

Bernstein, along with Marshelle Smith Warren, chief medical officer, will oversee the advancement of the eAPC program and clinical trial, the company stated.

Cost savings from the reprioritization are expected to extend SQZ's cash runway into 2024. As of Sept. 30, the company reported cash and cash equivalents of $84.2 million, according to its most recent financial report. At the time, the finances were deemed sufficient to fund operating expenses and capital expenditure requirements into the fourth quarter of 2023.

Following the announcement, SQZ investors began showing their displeasure by dumping the stock. Shares were down nearly 20% in premarket trading to $2.02. The stock closed at $2.51 on Wednesday.

In a brief statement, Bernstein said the company intends to be disciplined with its available capital and pursue the opportunities that hold the most promise.

In its announcement Thursday morning, SQZ said it will shift its focus from its first-generation antigen-presenting cells (APC) therapy to the eAPC format. SQZ will switch some of its APC-focused trials to the newer eAPC platform, the company noted.

Additionally, SQZ will pause ongoing programs that use its APC, active antigen carrier and tolerizing antigen carrier (TAC) programs. 

The new prioritization will enable the company to deliver data readouts from the highest-dose monotherapy cohort of its Phase I/II trial assessing eAPC, SQZ noted in the announcement. Those results are expected in the middle of 2023.

Despite the pause of programs, SQZ intends to present data from its APC program candidate, SQZ-PBMC-HPV, at the European Society of Medical Oncology—Immuno-Oncology meeting, Dec. 7-9.

The presentation will include high-dose monotherapy and combination data. SQZ will also present initial data from the first cohort in its Phase I/II COMMANDER-001 study assessing SQZ-eAPC-HPV at the same conference.

In the meantime, SQZ acknowledged it will explore partnerships and collaborations for its earlier-stage assets and programs, including TAC, as well as the company’s point-of-care manufacturing capabilities.

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