After losing its powerhouse partner, IGM Biosciences closed “most” of its labs and offices and initiated a strategic review of potential strategic alternatives and options for the business.
Sanofi has turned its back on its partner IGM Biosciences, forcing the small California biotech to enact drastic strategic measures, including an 80% reduction in force.
IGM made the announcement in an SEC document on Thursday, noting that Sanofi had informed it of the decision to walk away on Monday. The contract will formally end 30 days after the notice. IGM did not provide a specific reason for the termination, only revealing in its filing that the companies “concluded that conducting further activities under the Agreement was not in the interests of either party.”
Losing a powerhouse partner is a big blow for IGM, which on Thursday also said it would lay off around 80% of its remaining employees “to preserve cash.” The biotech has also closed “most” of its laboratories and offices.
“The Company continues to evaluate potential strategic alternatives and reorganization options,” IGM wrote in its SEC document, though it did not specify what these options might be.
According to its annual report, IGM had 149 full-time employees at the end of 2024. In January, the biotech reduced its workforce by 100 employees, corresponding to 73% of its headcount, leaving it with 37 full-time staff. Thursday’s cuts would leave IGM with around 7 employees.
As of Dec. 31, 2024, IGM still had $183.8 million in cash, cash equivalents and marketable securities—enough to keep it afloat “for at least one year” after the issuance of the annual report.
Sanofi and IGM first partnered up in March 2022, when the pharma fronted $150 million to co-develop six IgM antibody agonists—three against cancer indications and three for immunology or inflammation targets, though the specific targets were not announced. Sanofi at the time also promised up to $940 million in milestones for each oncology target, and up to $1.065 billion such payments for each immunology/inflammation program. All told, the contract could surpass $6 billion in value.
But in April 2024, the partners readjusted the agreement, narrowing it to just the three immunology/inflammation targets. The original payment terms from the 2022 contract were retained, and IGM regained the global rights to all technologies related to the cancer work it did with Sanofi.
IGM joins the growing group of small- and medium-sized biotechs that have hit a rough patch in recent months. Also on Thursday, RallyBio let go of 40% of its employees following the underwhelming mid-stage performance of its former lead asset last month. And last week, Pliant Therapeutics similarly laid off around 45% of its workforce in a bid to extend its cash runway and support the late-stage development of its drug candidates.
