Genocea Biosciences Inc GNCA announced a 40-percent workforce reduction Monday as it officially shifts focus to immuno-oncology and neoantigen cancer vaccines and explores strategic alternatives for its former lead candidate.
The Street reacted with a sharp pullback and a Tuesday ratings downgrade, but management said the move has been a long time coming.
“We have been publicly focusing our research and pre-clinical efforts on immuno-oncology for some time now given the great potential we see for our ATLAS platform to be superior to others’ approaches for neoantigen selection,” CEO Chip Clark told Benzinga.
The firm will terminate research and spending on its previously emphasized GEN-003 candidate for genital herpes, which is ready for phase 3 studies.
"The significant financial resources required to advance GEN-003 into a large and long Phase 3 program are beyond Genocea alone,” Clark said. “As such, we are reviewing strategic alternatives for GEN-003 as we seek the right partner to move the program forward.”
He expects restructuring associated with the program to result in annualized payroll savings of $6.5 million.
Looking ahead, the company expects to file an Investigational New Drug application and launch a phase 1 clinical trial for its lead immuno-oncology candidate, GEN-009, in the first half of 2018. The peptide vaccine is meant to direct T cells to attack tumors using antigens selected by Genocea’s proprietary ATLAS platform.
At the time of publication, Genocea was down 57.4 percent in pre-market trading.
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