Five Prime Therapeutics said it will eliminate approximately 70 jobs—about 40% of its workforce—and shrink its facilities as part of a restructuring by Chairman and Interim CEO William Ringo that is intended to conserve cash without impacting or delaying its clinical programs.
Seventy percent of those approximately 70 jobs—about 50 positions—will be eliminated by year’s end, with the rest to be cut in 2020. The layoffs will be carried out across all functions, Five Prime said.
Five Prime estimated that it will incur approximately $3 million of pre-tax charges for severance and other costs related to the restructuring, primarily this year—but expects to save approximately $20 million each year
“This restructuring provides the cash runway to prioritize future pipeline investments based on clinical data readouts in 2020. It also allows us to evaluate long-term strategies to grow our pipeline,” Ringo said yesterday in a statement. “We acknowledge this decision impacts many talented employees who helped build Five Prime into a clinical-stage company. We are grateful for their contributions.”
Five Prime announced Ringo’s immediate appointment as interim CEO on September 19; he has been chairman since January, and has served on the board since 2014. Ringo succeeded Aron Knickerbocker, who resigned after less than two years at the helm “to pursue new challenges and opportunities,” according to the company.
“My immediate focus as CEO has been to conduct a review of Five Prime’s operations with the goal of ensuring long-term sustainability and value creation,” Ringo also stated.
Zai Labs, BMS Collaborations
Five Prime’s pipeline is led by Bemarituzumab (FPA144), a first-in-class isoform-selective antibody with enhanced antibody-dependent cell-mediated cytotoxicity (ADCC) that is being developed with Zai Lab in development as a targeted immunotherapy for tumors that overexpress fibroblast growth factor receptor 2b (FGFR2b).
Bemarituzumab is under study in the Phase III FIGHT (FGFR2b Inhibition in Gastric and Gastroesophageal Junction Cancer Treatment) trial (NCT03694522). The global, randomized, double-blind, controlled study is designed to evaluate the efficacy of bemarituzumab + mFOLFOX6 versus placebo + mFOLFOX6 in patients with FGFR2 selected Gastric Cancer (as determined by prospective IHC FGFR2b overexpression and/or a ctDNA blood assay demonstrating FGFR2 gene amplification).
Five Prime has said it plans to conduct an early futility analysis for the FIGHT trial during the first half of 2020, seeking to ensure that the trial is adequately powered to detect an overall survival benefit at full enrollment.
Also in Five Prime’s pipeline is Cabiralizumab (FPA008), an investigational antibody designed to inhibits the colony stimulating factor-1 receptor (CSF1R) and blocks the activation and survival of macrophages. Five Prime is developing Cabiralizumab with Bristol-Myers Squibb (BMS) through an up-to-$1.74 billion collaboration launched in 2015.
Since then, the companies have established a clinical program that includes Phase II trials assessing Cabiralizumab with BMS’ cancer immunotherapy Opdivo® (nivolumab) in oncology indications that include Stage IV pancreatic cancer achieving disease control in response to first-line chemotherapy via gemcitabine (GemCaN Trial, NCT03697564 ), advanced pancreatic cancer (NCT03336216) , and resectable biliary tract cancer (NCT03768531).
Shrinking Facilities Footprint
Five Prime said it also plans to reduce its facilities footprint by either subletting a “significant” portion of its leased space or subletting all of its building and relocating to a smaller space. Five Prime now leases 115,466 square feet of office and laboratory space at 111 Oyster Point Boulevard in South San Francisco, CA, under a lease that expires on December 31, 2027, according to the company’s Form 10-K annual report, filed February 26.
According to that report, Five Prime had 209 full-time employees and a part-time staffer as of December 31, 2018. Just two weeks later, Five Prime sliced that workforce by 20%, eliminating 41 jobs primarily in “research, pathology and manufacturing,” through a restructuring by Knickerbocker that refocused the company on five clinical programs in various solid tumor types and addressing multiple cell types in the tumor microenvironment.
Despite the planned layoffs and facility consolidation, Five Prime reaffirmed earlier financial guidance to investors in which it projected ending this year with $148 to $153 million in cash, cash equivalents and marketable securities. That’s 28.5% to 31% below the $214.131 million with which the company ended the second quarter.