Dive Insight:

It didn’t take long for Yumanity to attract attention following its debut in late 2014. Powerful investments firms and large pharmaceutical companies like Biogen and Sanofi saw potential in Yumanity’s scientific approach, which uses yeast to better understand how to create treatments for neurodegenerative diseases. The biotech’s founding trio of Tony Coles, Susan Lindquist and Ken Rhodes were also well known in the industry for their skills in corporate management, protein research and brain drug development.

By the summer of 2020, Yumanity was hitting several of the most important milestones for any young drug startup. It inked a research and development deal with a major drugmaker, Merck & Co., and had made the leap to the public markets through a reverse merger with Proteostasis Therapeutics.

But over the last year and a half, investors appear to have lost much of their confidence in Yumanity. The company’s share price, which hovered around $1.50 as of Thursday morning, has dropped nearly 95% since August 2020.

Arguably the biggest setback to Yumanity came last month, when the Food and Drug Administration put a partial hold on clinical trials testing multiple doses of the company’s most advanced experimental medicine, which is being developed as a treatment for Parkinson’s disease.

Yumanity is now trying to save the business, both through a board-approved restructuring plan and a search for a potential deal.

From the restructuring effort, Yumanity expects to incur a non-recurring charge of approximately $400,000 in the first quarter. In the company’s most recent full-year earnings report, it reported having 44 full-time employees and about $12 million in general and administrative operating expenses.

Yumanity isn’t alone in its efforts. A group of other biotechs, including Zymeworks, Theravance Biopharma and Esperion Therapeutics, have turned to large-scale layoffs over the past year as a means of saving cash.