The cessation of operations does not come as a complete surprise. The biotech, in an earnings call in November last year, had flagged that it would run out of cash at some point in the second quarter.
According to Friday’s SEC filing, a strategic process to find a solution, with Kaleido having engaged professional advisors, “did not result in the identification of any viable transactions.”
The company had already shrunk its workforce, back in January this year, following its decision to halt a planned phase 2 trial in chronic obstructive pulmonary disease (COPD) and to end its agreement with the COPD Foundation.
Last year, Kaleido received a warning letter from the US Food and Drug Administration (FDA) over a program it was running with its COPD drug in COVID-19 studies. The FDA said the company failed to seek an Investigational New Drug (IND) application for the study using its COPD therapy, KB109. Kaleido argued that it investigated KB109 as a food rather than a drug and did not need to be authorized under an IND.
Kaleido’s closure comes as several other biotechs are experiencing a cash crunch and as investor sentiment in the sector would seem to be waning, for now. Biogen, bluebird bio, and Taysha, among others, have announced layoffs of late.
Bluebird bio restructuring
Last Tuesday, gene therapy player, bluebird Bio, reported it was cutting staffing numbers by nearly 30%, with it targeting up to US$160m in cost savings over the next two years. The restructuring drive is expected to lower the company’s 2022 cash burn to less than $340m, with a 35 to 40% reduction in operating costs anticipated by year-end 2022.
In March, the biotech had warned that its financial position raised “substantial doubt” about its ability to continue as a going concern.
Bluebird bio has faced a number of ‘unexpected hurdles’ recently in its bid to get approval for its investigational therapies.
In December 2021, the FDA paused a trial of its gene therapy candidate - lovo-cel - for sickle cell disease patients under the age of 18, while, in January this year, the US regulatory body extended the review period for the biologics licensing applications (BLA) for bluebird's lentiviral vector gene therapies – betibeglogene autotemcel (beti-cel) for beta-thalassemia and elivaldogene autotemcel (eli-cel) for cerebral adrenoleukodystrophy (CALD).
CEO Andrew Obenshain, on a call last week, noted the combination of those setbacks plus a “tough biotech market” has taken some traditional financing off the table in the near term. “We’re optimistic that these options may be viable sources of funding in the future, but we recognize the need for action today.”
Bluebird said it now intends to sharpen its focus on near-term catalysts, including anticipated FDA approvals for both of its gene therapies and that it also expects to submit a BLA for lovo-cel in Q1 2023.
The company outlined how it is intending to maintain targeted research efforts focused on in vivo lentiviral vector (LVV) gene therapies and that it will deprioritize direct investments in reduced toxicity conditioning and cryopreserved apheresis.
Taysha narrows R&D pipeline
Texas based Taysha, a biotech also focused on gene therapies, announced a 35% reduction in employees at the end of March. It has narrowed its R&D pipeline to two programs: giant axonal neuropathy (GAN) and Rett syndrome.
“Activities for other ongoing clinical programs will be minimized and all additional research and development will be paused to increase operational focus and efficiency,” it added.