Argos Therapeutics has already secured financing expected to carry the company far enough to report late-stage clinical trial results for its experimental kidney cancer treatment, but that hasn’t stopped the company from taking additional cost-cutting measures.
Durham, NC-based Argos (NASDAQ: ARGS) is laying off 18 workers, representing 13 percent of its workforce, according to a regulatory document filed on Tuesday. The company says the cost-cutting move will save about $2.3 million annually, and that it expects to complete the layoffs by the end of the month.
Investors frowned on the news, and shares in Argos dropped more than 25 percent during trading Wednesday morning.
Argos also disclosed that Fred Miesowicz, chief operating officer for the company, is resigning effective April 22. Miesowicz notified Argos of his plans to resign on April 15, according to the regulatory filing. He will still keep ties with the company; Argos says it expects to enter a consulting agreement with Miesowicz that will continue through the middle of next year, when Miesowicz plans to retire. The terms of this consulting arrangement have not been finalized. Miesowicz has worked at Argos since 2003, first as vice president of manufacturing before also becoming chief operating officer in 2005.
Argos does not expect that the layoffs will affect the Phase 3 clinical trials of AGS-003, the company’s experimental treatment for kidney cancer. Last month, Argos secured private placement financing that will provide up to $60 million to the company as it completes Phase 3 trials on the treatment. But that money does not come all at once. Argos will receive the cash in three tranches; each installment is tied to reports on the clinical trial’s progress.
The Argos treatment is based on the company’s immunotherapy platform, called Arcelis. The company says that its technology takes a sample of a tumor, along with a patient’s own dendritic cells—cells that start the body’s immune response—and programs the dendritic cells to target the cancer. The resulting treatment, personalized to the patient’s cancer, can then be administered by injection.
Argos’ first target for its cancer immunotherapy technology is renal cell carcinoma, a form of kidney cancer. The Phase 3 trial is evaluating how well the Argos treatment works to extend overall survival when combined with the current standard of care, the Pfizer (NYSE:PFE) drug sunitinib (Sutent).
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