Inovio is reducing its workforce by 18% in a restructuring that will extend the biotech’s cash runway into 2024 and allow for prioritization of its lead DNA medicine programs. The cuts are in concert with previously announced changes to the biotech’s troubled COVID program.
The Pennsylvania company announced the corporate reorganization in a statement Tuesday morning, saying that besides 18% of full-time employees heading out the door, there will also be an 86% reduction in contractors. The cuts will impact about 55 employees, according to a related regulatory filing.
The company also noted “other cost-saving measures” that will help reduce operating expenses by 30% over the next 18 months but did not elaborate. The company will incur a one-time charge of $1.6 million for the measures in the third quarter.
Inovio reported a cash position of $401 million at the end of 2021, compared to $411.6 million the year before, according to a fourth quarter earnings report.
"The organizational adjustments we've announced today underpin our strategy to realize the promise of DNA medicines and better position INOVIO for future growth," CEO Jacqueline Shea, Ph.D., said in a statement.
The cuts come just two months after Shea took over the C-suite from founding CEO, Joseph Kim, Ph.D., amid a tumultuous time for the biotech. At the time of the transition, Board Chair Simon Benito said this is a “particularly challenging period in Inovio's history.”
Those comments seemed to foreshadow the tough choices ahead for Shea. She said in the statement announcing the re-organization that the cuts will allow Inovio to focus on its lead pipeline candidates, which include a COVID-19 vaccine booster INO-4800 and an HPV program. Readouts from these candidates are expected later this year.
Inovio in March announced an endpoint switch for its COVID vaccine after data suggested the shot would not stand up to the latest variant, omicron. The change meant another delay for the program, which has faced a rocky road. If ever approved, INO-4800 will reach a market saturated with other, well-established options from Pfizer-BioNTech, Moderna and others.
Shea seemed to hint at more changes to come, saying that while these cuts are focused on “near-term catalysts” the company is also improving its “prioritization processes in developing our entire R&D pipeline” to ensure the company can deliver products in the long term.
To read more about layoffs across the biotech industry, check out Fierce Biotech's Layoff Tracker.