Dive Brief:
- On the heels of a recent setback, Yumanity Therapeutics, a biotechnology company focused on neuroscience, plans to eliminate about 60% of its workforce as it explores paths forward, including a potential sale.
- The layoffs — which, according to Yumanity, should be completed by April — are part of a larger restructuring effort meant to reduce costs. According to its most recent earnings report, Yumanity recorded a $29 million net loss from operations over the first nine months of last year. As of Sept. 30, the company had $46 million worth of cash, cash equivalents and marketable securities.
- Yumanity is now evaluating various “strategic alternatives,” among them a business combination such as an acquisition, merger or reverse merger. The company said it’s also considering licensing deals and asset sales. However, Yumanity cautioned that its review may not result in any successful agreements or transactions, and that a timeline for when this process will conclude has yet to be established.
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.
