Neumora Therapeutics is laying off 35% of workers after its most advanced asset failed a pair of Phase 3 studies, sending the biotech’s stock spiraling early Monday.
Neumora Therapeutics is discarding its oral drug candidate designed to treat major depressive disorder after it failed to meet the primary or key secondary endpoints in two late-stage studies.
The Massachusetts-based biotech will now lay off 35% of its workforce, according to a Monday release announcing the Phase 3 flops and subsequent candidate discontinuation.
Neumora’s stock spiraled by nearly 50% in premarket trading Monday following the announcement.
Neumora’s navacaprant, a kappa opioid receptor (KOR) antagonist, was evaluated in the Phase 3 KOASTAL-2 and KOASTAL-3 trials for major depressive disorder (MDD). At six weeks, the asset failed to elicit any statistically significant improvement in depressive symptoms, as measured by the Montgomery-Asberg Depression Rating Scale.
Among more than 400 KOASTAL-2 participants, the navacaprant arm demonstrated a similar symptom score to those on placebo, while the 400-plus patients in KOASTAL-3 actually saw a numerically lower score than placebo comparators.
While the data are disappointing, the outcome is not wholly unexpected, analysts wrote on Monday. In January 2025, Neumora announced the failure of KOASTAL-1 in MDD, prompting the biotech to pause and rework the other two studies, which were initially designed as replicate trials. Stifel analysts also cited a lack of efficacy shown by Johnson & Johnson’s now-discontinued KOR aticaprant in MDD.
Given the pre-existing skepticism, William Blair wrote Monday that the 50% premarket drop in share price is “an overreaction to a very high risk event.”
“While any clinical miss is always disappointing, we actually view this event as a clearing event for the stock as focus now shifts toward the company’s promising clinical pipeline, which includes NMRA-511 for Alzheimer’s disease agitation (AD-A), M4 positive allosteric modulator NMRA-898 for schizophrenia, and NLRP3i inhibitor NMRA-215 for obesity,” the analysts continued.
For the Alzheimer’s asset, Neumora is expecting Phase 1 data in healthy adults in the fourth quarter of this year, with plans to launch a Phase 2b trial in the indication by the end of 2026. For NMRA-898 in schizophrenia, the biotech anticipates a data readout in the second half of this year. Neumora also plans to share 13-week preclinical findings for its obesity program, which RBC Capital Markets deemed “a potentially differentiated opportunity.”
“Discontinuation of navacaprant, while always viewed as a very high-risk program, does remove some optionality around a large, late-stage opportunity, though with promise remaining in the rest of the early-stage pipeline, any excessive stock weakness could provide a particularly interesting entry point for a revamped go-forward story,” RBC analysts wrote.
The promise of Neumora’s early assets will have to deliver rapidly, as the biotech’s current cash runway is expected to last only into the third quarter of next year.
For now, the company aims to cut costs with the substantial workforce reduction. As of the end of last year, Neumora had 96 full-time employees, according to the company’s annual filing, meaning the cuts could affect more than 30 employees. More than half of the biotech’s staff is primarily engaged in R&D.
The reduction, which is expected to occur in the second and third quarters of this year, is projected to save the company around $10 million annually.
