June 10, 2015
By Alex Keown, BioSpace.com Breaking News Staff
LOUISVILLE, CO — Reeling from a failed clinical trial of a hepatitis drug, cancer drugmaker GlobeImmune, Inc. said it will eliminate “the majority” of it workforce as part of an evaluation of strategic options that includes conservation of capital, the company announced this morning.
The workforce reductions came on the heels of disappointing results for its Phase II clinical trial of hepatitis B drug GS-4774. Although the drug proved to be safe during its trial, GS-4774 failed to indicate a significant reduction in hepatitis B surface antigen (HbsAg) at week 24, although there were some promising results at week 48.
“This workforce reduction is a necessary action to conserve working capital and provide maximum flexibility in determining the future direction of GlobeImmune,” Timothy C. Rodell, president and chief executive officer GlobeImmune, Inc., said in a statement.
News of the layoffs have not had a negative impact on this morning’s trading. GlobeImmune stock (GBIM) was slightly up, trading at $3.88 over Tuesday’s close of$3.83 per share. The stock has yet to recover from its fall from $8.24 per share prior to the release of the disappointing data from the clinical trial.
GlobeImmune said the workforce reduction is not expected to have an impact on ongoing clinical trials being conducted by its collaborators in oncology and hepatitis B.
At the close of 2014 GlobeImmune had 22 employees, 17 of which were engaged in research and development and manufacturing activities and five were engaged in support administration, including business development, finance, information systems and human resources.
The layoffs will impact a minimum of 10, a company spokesperson said this morning. Rodell said the company appreciated the efforts of the employees affected by the layoff.
No information was disclosed on how much capital the layoffs would free up, nor what the company’s next steps were in regards to GS-4774. Following the company’s disappointing clinical trial results Rodell said he believe the first Phase II trial “suggests initial biologic activity at the highest dose tested.”
GlobeImmune was collaborating on the hepatitis drug with Gilead Sciences, Inc. . Gilead‘s pipeline includes hepatitis drugs Sovaldi and Harvoni and the company has another hepatitis B candidate, GS-9620, in its portfolio.
Chronic hepatitis B is the most common serious liver infection in the world affecting approximately 400 million people. Untreated chronic HBV infection is associated with significant increase in related diseases, including liver cirrhosis, hepatic decompensation and liver cancer.
In addition to GS-4774, GlobeImmune is developing three other drugs for infectious diseases and five for different types of cancers.
The company showed a net loss of $16.3 million in 2014. In May the company reported a net loss of $1.6 million for the first quarter of 2015. GlobeImmune reported cash and cash equivalents of $14.4 million, which it said would keep it operational through 2016. However, the quarterly report was released about two weeks before GlobeImmune revealed the failure of GS-4774.
GlobeImmune does not have a defined timeline for the strategic review process and is not confirming that the review will result in any specific action or transaction, the company said.
When Will Pfizer’s Breakup Happen?
Speculation that the revamping of Pfizer Inc. ’s internal business structure could happen as soon as this year has biotech wondering just when this Big Pharma company could see changes.
Last week an analyst with J.P. Morgan said he thinks there will be a much faster timeline than most of Wall Street had predicted for Pfizer’s stated mission to refocus its efforts on new medicines.
Pfizer initially announced in 2012 that it would be shedding units that were non-essential to that goal. It then promptly sold its nutrition silo to Nestle for $11.85 billion, which was rapidly accompanied by a public spin-off of its animal health business for $2.2 billion.
“While a Pfizer break-up would likely be a 2017 event, we see potential catalysts in 2015-2016,” said Chris Schott, an analyst at J.P. Morgan. “Three years of audited financial statements (2014-2016) are required before any part of Pfizer can be spun off, and we also see 2017 as an attractive time for action as investors see Pfizer’s innovative pipeline clearly contributing to growth and the established business having transitioned to a more stable profile.”
BioSpace wants to know what you think: Will Pfizer be a changed company by the end of 2015?
