August 1, 2016
By Alex Keown, BioSpace.com Breaking News Staff
AMES, Iowa – NewLink Genetics Corporation is slashing 100 positions, about 43 percent of its workforce, as part of a corporate restructuring following the failure of that company’s Phase III pancreatic cancer treatment, Algenpantucel-L.
In May, shares of NewLink plummeted after the company announced its pancreatic cancer vaccine Algenpantucel-L failed to meet Phase III endpoints and could even ultimately harm patients. Study results showed that patients taking the drug during the trial actually fared worse when it came to survivability than patients taking placebo.
On Friday the company announced the restructuring plan, which includes the terminations as well as an accelerated focus on the development of its cancer drug indoximod to turn things around. In its announcement, NewLink did not specify where the bulk of the positions would come from that it intends to eliminate. The company did say it recorded $12.3 million in restructuring expenses in the second quarter, which includes severance expense, the impairment of fixed assets and the costs of terminating certain contracts.
In addition to a focus on indoximod, the company also said it plans to continue its collaborative partnerships with Genentech for the development of GDC-0919 and with Merck for the development of an experimental ebola vaccine. The company also has goals of advancing other drug discovery programs for the Zika virus as well as others.
Indoximod and GDC-0919 are both IDO pathway inhibitors and are in Phase I or Phase II clinical trials for a range of cancers, including breast cancer, melanoma, pancreatic cancer and others, the company said. Phase II results of a combination of Indoximod and gemcitabine/nab-paclitaxel for the treatment of metastatic pancreatic cancer are showing promise, the company said. Another trial is combining indoximod with checkpoint inhibitors for the treatment of unresectable stage 3 or 4 melanoma.
In addition to cutting the jobs, NewLink is also reducing its own physical footprint by more than half, going from 133,000 square feet of space to 66,000 square feet, the company said.
Nicholas Vahanian, president and chief medical officer of NewLink, said the company has the financial resources available that will allow it to “realize the potential of our product development pipeline as well as opportunities for the development of other potentially synergistic therapies that could provide benefit to patients with cancer.” According to its quarterly report, NewLink ended the quarter on June 30 with cash and cash equivalents of $160.5 million compared to $197.8 million for the year ending Dec.31, 2015.
Shares of NewLink are trading at $10.36 this morning.
