South San Francisco, CA November 8, 2015 Re-broadcast from BioSpace
After a string of disappointing clinical trials, South San Francisco-based KaloBios Pharmaceuticals, Inc. (KBIO) announced yesterday that it was slashing its workforce by 61 percent and is restructuring the company, as well as contemplating a sale.
The company indicated it will lay off 17 employees in order to shift resources to development of lenzilumab, or KB003, toward treatment of chronic monomyelocytic leukemia (CMML). The compound is an anti-GM-CSF mAb originally tested for asthma, but was not effective in clinical trials. The company’s IND in CMML, an orphan oncology indication, has been cleared by the U.S. Food and Drug Administration (FDA), and is currently initiating a Phase I trial and expects to start dosing patients before the end of the year.
In addition, KaloBios plans to pause enrollment in its Phase II trial of KB004 in certain hematologic malignancies. KB004 is a non-fucosylated mAb that targets EphA3 in hematologic cancers and solid tumors. It apparently has a number of cancer treatment mechanisms. The Phase I dose escalation trial is fully enrolled.
“While this decision was extremely difficult, aligning and managing our limited resources to maximize the opportunity for continued development of lenzilumab is our most important priority,” said Herb Ross, the company’s chief financial officer and interim chief executive officer, in a statement. “I would like to sincerely thank all of our departing employees and recognize their important and valued contributions to KaloBios.”
KaloBios also indicates that it is evaluating various strategies moving forward, including possible sale of the company or its assets. Also, as a result, it will not be filing its Form 10-Q for the third quarter on time, and will instead file a 12b-25, notification of inability to timely file form.
On Aug. 10, the company released its second quarter financial results, indicating a net loss at the quarter ending June 30 of $6 million, or $1.46 per common share. This is compared to a net loss of $9.8 million or $2.38 per common share for the same period in 2014. Research and development expenses were $3.3 million for the quarter, compared to $6.7 million for the third quarter in 2014. As of June 30, the company reported cash, cash equivalents and investments of $23.2 million.
In January 2015, the company reported that one of its drug candidates, KB001-A, failed to meet the primary endpoint in a Phase II trial. KB001-A was being developed to treat Pseudomonas aeruginosa (Pa) lung infections in cystic fibrosis patients. The study failed to show effectiveness and there was no increased time period before the need for antibiotics; in other words, the drug did not cut the risk of pulmonary exacerbations. It also did not show improvement in comparison to placebo. As a result, the company discontinued the program.
KaloBios stock has been muddling along at a steady state since it plummeted in January 2015. Shares traded for $14.80 on Jan. 5, 2015, and traded for $4.19 on Jan. 8. Shares spiked briefly to $4.01 on Sept. 4, and are currently trading for $1.93.