The bad news for GlobeImmune keeps coming. The Louisville, CO-based drug company announced today it is slashing the majority of its workforce and is evaluating its strategic options in the wake of a failed trial for the chronic hepatitis B drug it was developing.
GlobeImmune (Nasdaq: GBIM) announced the negative results in late May, and the downsizing was the inevitable next step. As of Dec. 31, the company had 22 employees, according to its annual report to the SEC. It did not disclose how many would lose their jobs in today’s announcement.
“Following our recent data announcement in our hepatitis B program, this workforce reduction is a necessary action to conserve working capital and provide maximum flexibility in determining the future direction of GlobeImmune,” president and CEO Timothy C. Rodell said.
GlobeImmune said the job cut was not expected to affect ongoing clinical trials for its oncology and hepatitis B treatments. The company is collaborating with Gilead Sciences and Celgene on potential drugs.
The company’s stock slid nearly 25 percent this morning, trading at $2.84 around 11 a.m. MDT. GlobeImmune shares were at $8.24 a share before the negative trial results were announced.
GlobeImmune, which went public last year after a long-delayed process, develops treatments for cancer and infectious diseases. It uses a proprietary technology it calls Tarmogens to activate the immune system by stimulating cellular immunity, known as T cell immunity, the company said. Traditional vaccines predominately stimulate antibody production.
The company’s first drug candidate, an oral antiviral drug named GS-4774, proved to be ineffective in a Phase 2 study that finished this spring. The hope was that the drug would lead to long-term viral suppression. GlobeImmune was developing GS-4774 in collaboration with Gilead Sciences.
Today’s layoffs are the latest bump in what’s been a rocky ride for GlobeImmune, which was founded in 1995. The company, which had lost $222.7 million as of Dec. 31 and did not anticipate turning a profit for the next few years, initially attempted to go public in late 2012, but postponed and then cancelled the offering. It revived the attempt last year and did go public in July after downsizing its offering—only to experience the failed trial in May.