Biotech company CytomX Therapeutics will lay off staff in a bid to conserve cash, announcing Thursday a restructuring plan that will prioritize investment in the company’s preclinical and early-stage pipeline.
CytomX said it will reduce its workforce by 40%, mostly affecting staff in development and administrative roles. As of December 2021, CytomX employed 174 full-time workers.
With the layoffs, CytomX joins a growing list of biotech companies that have trimmed staff in 2022. A recent tally by PWC found “more than 60” biotechs had announced layoffs in 2022, while trade group BIO counted 54 through mid-June.
Along with the restructuring, CytomX’s chief operating, finance and medical officers will depart in early and late September, the company disclosed in a regulatory filing. CytomX will continue its partnerships with AbbVie, Amgen, Astellas Pharma and Bristol Myers Squibb.
The company is deprioritizing investment in its antibody-drug conjugates CX-2043 and praluzatamab ravtansine, and focusing on two other cancer drugs, both of which are set to begin clinical testing in 2023.
Earlier this month, CytomX had said it would stop enrolling patients into two parts of a study of praluzatamab ravtansine and seek partners to further advance the drug after trial results did not fully meet expectations. Roger Song, an analyst at Jefferies, wrote in a note to clients that he was not surprised by the restructuring following the study readout.
As a result of the cost-cutting, the company says it now has enough cash to fund operations into 2025, a longer timeframe than executives had predicted in May.
CytomX cited the shaky market for biotech stocks in announcing its plans. The prolonged downturn has been felt by companies large and small, making it more difficult for drugmakers to raise cash.
“In the context of the challenging current investment climate for biotechnology, we are making a series of changes to ensure CytomX remains well positioned for the future,” Sean McCarthy, executive officer and chairman at CytomX Therapeutics said in a statement.
Shares in CytomX, which have fluctuated between $1 and $2 apiece in recent months, rose by nearly 10% to trade around $1.40 on the news. A year ago, shares were worth about $6.