ALX Oncology is laying off 30% of its workforce as the biotech seeks to channel its cash into further trials of its CD47 blocker.
The drug, called evorpacept, is in a pair of phase 2 trials for advanced head and neck squamous cell carcinoma. A phase 2 trial in gastric cancer last year failed to deliver on the promise shown by an earlier interim analysis, but ALX said this morning that it is still planning to discuss a registrational path for the drug based on the gastric data.
ALX also wants to launch trials in breast and colorectal cancers that could “pave additional regulatory paths forward,” CEO Jason Lettmann said in a March 5 update. In addition, the company will today unveil an antibody-drug conjugate called ALX2004 for which the company will seek FDA permission in the coming weeks to begin clinical studies.
“To ensure that the company is strongly positioned to focus on our highest priority programs, we are streamlining our organization and prioritizing resources to execute on our current studies, progress our de-risked anti-cancer antibody combinations for evorpacept, as well as advance our novel ADC into the clinic,” Lettmann said.
“In order to achieve these additional value generating milestones for breast cancer, colorectal cancer and ALX2004 with our existing cash, we are optimizing resources and making the difficult decision to reduce our workforce, primarily in preclinical research,” the CEO added.
In practice, this means about 30% of the company’s staff will be waved off as part of “substantial decreases in preclinical research investments.”
The savings should stretch out ALX’s cash runway into the final months of 2026. The company had previously expected the $162.6 million it ended September with to last into the first quarter of next year.
Evorpacept generated plenty of excitement in 2023 when an interim analysis of a phase 2 trial in gastric cancer suggested a 52% response rate in the evorpacept arm and just 22% in the control cohort. But, when the full readout appeared the following year, those rates had partially equalized to 40.3% and 26.6%, respectively.
Still, the company celebrated the data as evidence of “the first and only CD47-blocking agent to show a durable clinical benefit and a well-tolerated safety profile in a prospective randomized clinical trial.”
In today’s release, Lettmann said the biotech’s “conviction in evorpacept’s potential to deepen responses to important available anti-cancer antibody therapies, particularly in patients with HER2-positive cancers, has been strengthened by recent data.”