Around 20% of employees at the Somerville, Massachusetts-based clinical-stage microbiome therapeutics firm will be let go, according to plans announced yesterday [Tuesday April 20].
The workforce reduction, which will impact 37 employees, follows Finch’s recent move to pause its chronic hepatitis B program, the clinical hold by the FDA on its investigational new drug (IND) application for CP101, a donor-derived microbiome drug aimed at the prevention of recurrent C. difficile infection (CDI), along with associated delays to its recurrent CDI and ASD programs.
Mark Smith, CEO of Finch Therapeutics, said: “This was a difficult decision; however, we believe [it] will put us in a stronger financial position to execute upon our strategic priorities and continue to deliver on our mission to harness the microbiome to serve patients and their families.”
The restructuring will allow it to focus its financial resources on its CDI and autism spectrum disorder (ASD) development programs, along with its Takeda-partnered work on targeted microbiome therapeutics for inflammatory bowel disease (IBD), said the developer.
As per a regulatory filing on the restructuring, Finch estimates that it will incur approximately US$1.1m in costs consisting of one-time severance payments, healthcare coverage, outplacement services and related expenses. It expects to record a significant portion of these charges in Q2 2022. The layoffs, it added, are expected to be substantially completed by the end of that quarter.
Donor screening protocols
The IND application for CP101 is on clinical hold while Finch awaits feedback from the US Food and Drug Administration (FDA) on the complete response letter that it submitted related to its SARS-CoV-2 donor screening protocols and associated informed consent language.
At the outset of the COVID-19 pandemic in March 2020, the FDA issued a public safety alert regarding the potential risk of transmission of SARS-CoV-2 virus through the use of donor-derived investigational microbiome therapies and the need for additional safety precautions. At that time, the FDA placed Finch’s IND for CP101 and the IND of its then-contract manufacturer, OpenBiome, on partial clinical hold, requiring the implementation of SARS-CoV-2 testing protocols for any microbiota material donated on or after December 1, 2019.
Notwithstanding the partial clinical hold notices, Finch was able to continue dosing patients in its then-ongoing PRISM-EXT Phase 2 open-label trial of CP101 in recurrent CDI as all of the CP101 lots used for PRISM-EXT were manufactured from material donated prior to December 1, 2019.
In January 2021, Finch’s then-contract manufacturer, OpenBiome, was released from clinical hold after implementing a direct testing method for SARS-CoV-2 provided by a third-party vendor. In March 2021, Finch acquired certain manufacturing assets from OpenBiome, and in November 2021, began dosing participants in PRISM4 with CP101 lots that had been screened for SARS-CoV-2 using the same test method and vendor used by OpenBiome.
Following communications with the US regulator, Fitch received a letter from the FDA on February 24, 2022, stating that the agency needed additional information about the company’s SARS-CoV-2 screening protocols and that a clinical hold remains in effect until the FDA’s requests have been satisfactorily addressed.