Axcella Therapeutics is reducing its workforce by 85% as it drops its nonalcoholic fatty liver disease program and focuses its remaining resources on pushing the candidate as a long COVID treatment.
The 15% of employees who have been retained to “execute the strategic process” will not include Chief Financial Officer Bob Crane or Chief People Officer Virginia Dean, the company revealed in a postmarket release Dec. 14.
As recently as September, Axcella CEO Bill Hinshaw was touting a glimpse at early data from an ongoing phase 2b nonalcoholic steatohepatitis (NASH) trial of the therapy, an orally active mixture of amino acids dubbed AXA1125, as “extremely encouraging." Although the study remained blinded at the time, the biotech reported statistically significant changes in liver stiffness.
Already, though, the issue of money hovered over the company, with cash only expected to last until the first quarter of 2023—a year before the NASH study was due to read out. Some respite came thanks to $34.2 million brought in via financing deals, which meant that as of early November the company remained set on heading toward late-stage trials in both NASH and long COVID. Still, the biotech admitted at the time that its cash runway would run out at some point next year, depending on whether creditors called in debts.
With those NASH ambitions now dead, Axcella’s remaining hopes—and staff—will be focused on trying to get AXA1125 to market as a long COVID therapy. The therapy hasn’t had an easy time of it in this indication, either, missing its primary endpoint in a phase 2a study this summer. However, the biotech pointed to secondary endpoints to suggest physical and mental improvements.
The company is in active discussions with regulators in the U.S. and Europe about the candidate and is “enthusiastic about the clinical pathway for AXA1125 and long COVID fatigue, a disease that currently has no treatment options,” Hinshaw said in yesterday’s release.
“The strategic process we initiate today prioritizes efforts to support our long COVID program and will best position us to derive value from our platform technology and its corresponding programs,” Hinshaw added. “We are in active and accelerating business development discussions and are exploring creative collaborations to bring these innovations forward.”
The reference to “collaborations” could be a clue to Axcella’s future direction—and survival—although the company stressed in the release that “no assurances can be made as to whether a strategic transaction will be recommended by the Board of Directors.”
Axcella’s announcement continues a trend of biotech layoffs and pipeline culls that ramped up in November, with Fierce Biotech reporting on 23 companies that let go of staff last month alone.