Cancer-focused Alligator Bioscience is clamping down on costs, laying off 70% of its team in efforts to save around $6 million every year.
The Swedish biotech is “sharpening its primary focus” onto lead asset mitazalimab, a stimulatory antibody targeting CD40, according to a Dec. 2 release. The company cited “current capital restraints” as the reasoning behind the restructure, which includes a strategic review of all other pipeline candidates.
The workforce reduction is subject to negotiation with certain trade unions but will likely impact discovery and nonclinical roles. Alligator expects the restructure to slash annual operating costs by at least 65 million Swedish krona ($5.9 million), leaving 15 full-time employees on board.
After the restructure takes effect, Alligator will focus on late-stage development, with mitazalimab set to enter phase 3 testing. The biotech said it will be able to conduct limited research activities, most of which will relate to mitazalimab, via internal and external resources.
Mitazalimab is designed to treat metastatic cancers and was the previous focus of a since-terminated partnership with Johnson & Johnson’s Janssen Biotech. Back in 2015, Janssen inked an exclusive licensing agreement for rights to the immuno-oncology agent, but severed the agreement in 2019 after “a strategic portfolio decision by Janssen to prioritize other assets,” according to a press release shared at the time.
Since then, Alligator has run a phase 2 study assessing mitazalimab among previously untreated patients with pancreatic cancer. The open-label trial hit its main goal, demonstrating a confirmed overall response rate (ORR) of 40.4% among 57 evaluable patients, compared to an ORR of 31.6% reported in a similar patient population treated with chemotherapy alone.
Alligator is now preparing mitazalimab, which has also received FDA orphan drug designation, for phase 3 testing in metastatic pancreatic cancer. The biotech is also conducting partnership discussions related to the asset and expects to share data from a 24-month phase 2 follow-up in the first quarter of next year.
“The cost savings announced today will strengthen our ability to continue developing mitazalimab and enhance the chances to unlock its value by making it more attractive for partnership,” Alligator CEO Søren Bregenholt said in the release. “In order to focus our current resources on mitazalimab, our most important asset, we have no other option than to reduce our earlier stage research and development activities and workforce.”
The biotech has plans to finalize a rights issue—which allows existing shareholders to buy new shares at a discount from market price—slated for the first quarter of 2025. If the rights issue is fully subscribed, Alligator will have enough money to last through the end of next year.
The company’s share price, which is listed on the Stockholm Stock Exchange, has plummeted 53% since market open today.