Five Prime Therapeutics is cutting its headcount by 20 percent, part of a cash-saving effort the company is making to focus on the cancer drugs it has already advanced into clinical trials.
South San Francisco, CA-based Five Prime (NASDAQ: FPRX) said Tuesday that the corporate restructuring will reduce operating expenses by $10 million in 2019 to support on clinical-stage programs expected to report key data later this year.
“This was a hard decision to make, but we believe that effective use of capital is crucial to supporting our strong pipeline of anti-cancer drug candidates,” CEO Aron Knickerbocker said in a prepared statement.
Shares of Five Prime dipped by 2.3 percent to $10 each in after-hours trading.
Five Prime is a cancer drug developer. The company’s most advanced program, bemarituzumab, is an antibody drug developed to block a cancer protein called fibroblast growth factor receptor 2. Under a partnership with China-based Zai Lab (NASDAQ: ZLAB), the drug has advanced to a Phase 3 study testing it in gastric cancers.
Five Prime also has an alliance with Bristol-Myers Squibb (NYSE: BMY), which paid the biotech $350 million up front in 2015. The most advanced program in the alliance, cabiralizumab, is an antibody drug that blocks a protein called colony-stimulating factor-1. The drug is now in two Phase 2 studies in pancreatic cancer. Five Prime has been testing it in combination with Bristol drug nivolumab (Opdivo).
Cabiralizumab is also part of an early-stage test of a three-drug cocktail—Five Prime’s drug, Bristol’s nivolumab, and an experimental drug from San Carlos, CA-based Apexigen called APX-005M. That Phase 1/1b study is testing the combination in patients with melanoma, non-small cell lung cancer, or kidney cancer whose cancer has progressed following treatment with a cancer immunotherapy.
Three additional Five Prime programs, including one partnered with Bristol, are in early-stage clinical testing.
Under the restructuring, Five Prime said 41 employees will lose their jobs, mainly in research, pathology, and manufacturing. The company estimated it would take a $2 million charge for severance and other costs. Most of those costs will be recorded in the first quarter of this year. The company said it is implementing other cost-saving measures, but did not disclose what they are.
Five Prime finished 2018 with $270 million in cash, which the company expects will be enough to support its five clinical-stage programs to points where they can report data.
Pancreatic cancer cells image from the National Cancer Institute