Adverum cuts jobs, restructures to give eye gene therapy another shot
- Adverum Biotechnologies will restructure and pare down its workforce to help fund a new study of an eye gene therapy whose development has been slowed by serious side effects.
- Adverum didn’t detail the scope of the layoffs in a statement. But a research note from analysts with RBC Capital Markets indicated the restructuring will impact 78 jobs, about 38% of its workforce, and extend the biotech’s financial runway by a year. Adverum now has enough cash to last into 2025.
- The cost cuts will keep Adverum afloat beyond the anticipated results of a new Phase 2 study of its gene therapy, previously known as ADVM-022 and now ixo-vec, in age-related macular degeneration. Previous efforts to test the treatment in diabetic macular edema were halted after multiple patients developed inflammation.
Despite significant setbacks that have left the fate of its eye gene therapy in doubt and shares trading near all-time lows, Adverum hasn’t given up.
The company is one of a few gene therapy makers aiming to develop a one-time treatment for diabetic macular edema and age-related macular degeneration, two common forms of vision loss that are treated with chronic injections of biologic medicines. But those drugs, like Eylea and Lucentis, are highly effective and considered safe, making the bar much higher for a gene therapy whose main goal is to improve convenience.
Adverum’s program was also beset by side effects the company once described as “not seen before in ocular gene therapy,” a combination of inflammation, vision loss and decrease in eye pressure observed in five trial participants.
Adverum stopped that trial, in diabetic macular edema, in 2021. At the time, some analysts suggested the company should attempt a reverse merger, a way for struggling biotechs to bring in new assets by combining with a privately held company seeking fast access to the public markets.
The company instead vowed to press on. Executives suggested testing a lower dose than previously planned with a different regimen of protective drugs could lead to better results in AMD. In 2021, the company noted that no cases of severe inflammation were observed in DME patients treated with a lower dose or in participants with AMD in another trial.
Adverum has since gained clearance from U.S. regulators for its new plan, a Phase 2 trial in AMD that’ll test both the lowest dose evaluated in previous studies as well as one more than three-times lower. With shares trading at just over $1 apiece and equity harder to raise during the sector’s downturn, Adverum has turned to cost-cutting to save money and fund the work. The savings could enable the company to get to one-year results from that trial, in 2023, without needing to raise more cash, wrote RBC analyst Luca Issi.
Yet Adverum’s odds remain long. A rival gene therapy from Regenxbio is already in Phase 3 testing in AMD, and pending positive results, could lead to an approval filing in 2024. The company “remains a show-me story” given its history, Issi wrote. Additionally, Adverum’s decision to turn to layoffs, rather than a partnership, “may also signal limited strategic interest in the platform,” he added.
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