Nektar Therapeutics Announces Strategic Reprioritization and Cost Restructuring Plan, Including Layoffs of 60% of San Francisco-Based Workforce
Nektar Therapeutics, a biopharmaceutical company based in San Francisco, has announced a strategic reprioritization and cost restructuring plan that includes a new pipeline focus on immunology, several cost reduction initiatives, and layoffs of around 60% of its San Francisco-based workforce. The company is expecting to reduce its future operating expenses, extend its cash runway into the middle of 2026, and prioritize REZPEG development, its lead candidate in atopic dermatitis. In this article, we will take a closer look at the company's new plan and how it affects the company's future.
Nektar Therapeutics intends to work with Eli Lilly to ensure the continuation of REZPEG development, either under the existing Eli Lilly agreement or Nektar regains the rights to REZPEG. The company plans to advance two preclinical pipeline candidates in auto-immune diseases, including a new PEG-Colony Stimulating Factor (CSF1) program and a separate TNFR2 agonist antibody developed in collaboration with Biolojic Design. Additionally, Nektar will continue its Phase 2 study of NKTR-255 in combination with cell therapies and the Phase 2 JAVELIN Bladder Medley Study with partner Merck KGaA while exploring strategic partnership options for NKTR-255.
As part of the strategic reprioritization, Nektar also plans to reduce its San Francisco-based workforce by approximately 60%. Once the cost restructuring plan has been fully completed, the company is expected to have approximately 55 employees based in San Francisco. The restructuring also includes actions to reduce additional operating costs and is expected to be substantially completed by June 2023. Nektar expects non-recurring cash payments of approximately $8 million, primarily in the second quarter of 2023 associated principally with the workforce reduction.
As part of this initiative, Nektar also announced several changes to its executive team. Dr. Brian Kotzin, Nektar's Chief Medical Officer, will be stepping down from his full-time role but will continue to serve in an ongoing role as a strategic advisor to the company. Dr. Mary Tagliaferri, current Chief Development Officer, will assume the role of Chief Medical Officer. Jillian Thomsen will be stepping down from her role as Chief Financial Officer (CFO) and will depart the company in June following a transition period. The company has appointed Sandra Gardiner to the role of acting CFO.
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