Viracta lays off 23% of staff, pauses program to slim down for race to finish line in lymphoma

Viracta Therapeutics is going all-in on its lymphoma program. The biotech responded to phase 2 data by throwing its resources behind a plan to file for a blood cancer approval in 2026, hitting pause on its solid tumor program and putting 23% of its staff out of a job in the process.

San Diego-based Viracta has studied the combination of the HDAC inhibitor nanatinostat and antiviral valganciclovir in people with peripheral T-cell lymphoma (PTCL) and solid tumors. In both settings, the biotech has focused on Epstein-Barr virus (EBV)-positive cancers. The idea is to induce EBV expression with nanatinostat and the death of lymphoma cells that carry the protein with valganciclovir.

On Wednesday, Viracta reported phase 2 data on the drug combination in 21 patients with relapsed or refractory EBV-positive PTCL. The biotech saw overall and complete response rates (ORR/CRR) of 33% and 19%, respectively. In the 10 second-line patients, the ORR was 60% and the CRR was 30%.

The study is yet to reach the median duration of response. Those signs of efficacy, coupled with adverse events that were primarily mild to moderate and generally manageable or reversible, have led Viracta to reshape its strategy around the lymphoma opportunity.

Viracta is pausing its solid tumor program and making layoffs that will affect around 23% of employees. The biotech ended March with 40 full-time employees, 30 of whom worked in R&D. Viracta had $30 million at the end of June, a sum it expects to fund operations late into the first quarter of 2025.

The runway stops short of key events on Viracta’s timeline. Management plans to meet with the FDA to discuss the design of a randomized trial in second-line, EBV-positive PTCL in the first half of 2025. Viracta is aiming to start the study in the second half of 2025. In parallel, the biotech will continue to collect data from the expansion phase of its mid-stage trial with the goal of seeking accelerated approval in 2026.