Arena launched with $500 million in early 2024 to fund basic biological research, from which it planned to spin out dedicated companies to focus on drug development.
Despite deep-pocketed backers, Arena BioWorks is closing up shop amid larger challenges facing the biopharma industry.
In a brief press statement on Tuesday, Arena said that conditions across the industry “have changed dramatically and the rate of change is accelerating.” The circumstances show “no clear turning point amid policy uncertainty and weak funding,” the privately held biotech continued, leading investors to agree that “the only responsible action is to dissolve” the company.
Arena’s closure will leave some 50 employees jobless, STAT News reported on Tuesday, though the biotech insisted that it will support its staffers “with generous severance agreements.”
Arena launched in January 2024 as a biomedical research institute, with the bold mission to “uncover the mechanisms of disease” through basic research, which it would then use to produce therapies. This model, Arena said at the time, would provide an alternative to academic research, giving scientists the platform and funding to conduct their studies, from which a spinout company would be formed to focus on drug development.
To fund its aspirations, Arena received $500 million from a cadre of wealthy investors, among them Dell CEO and Founder Michael Dell and private equity maven Steve Pagliuca. Venture capitalist Jim Breyer, with a history of board membership at Facebook, Dell, WalMart and other big companies, also pitched in.
The times were tough for Arena, which in August this year was forced to downsize by 30%, laying off some 22 employees as part of its pivot away from cell and gene therapies, according to Fierce Biotech. Arena moved forward, prioritizing small-molecule and biologic therapies, a spokesperson told Fierce at the time, to more effectively utilize its resources and achieve its goal.
In its press statement on Tuesday, Arena said its scientists would continue the work that they started at the company, though it remains unclear how they plan to fund this research.
Arena joins the unfortunate group of biotechs that have decided to call it quits this year, defeated by the difficult funding environment and policy headwinds. In August, for instance, former Kite partner Appia Bio shuttered its operations after failing to secure enough financing to stay afloat. In May, ex-GSK collaborator iTeos Therapeutics also pulled the plug on its business before deciding in July to sell it off to Kevin Tang’s clean-up company Concentra Biosciences.
Other companies that folded this year include Vor Bio, Abata Therapeutics and NextRNA Therapeutics.
