Theseus Pharmaceuticals, which aimed to overcome the resistance that cancers develop to drugs, is laying off most of its staff and exploring options that could lead to deals that eke out some value from the company’s remaining assets.
The announcement after Monday’s market close come four months after early clinical data for Theseus’s lead program showed dose-limiting toxicities in two out of six patients. The finding led Cambridge, Massachusetts-based to discontinue that program.
Theseus has other programs and cash to support them. As of the end of the second quarter of this year, Theseus reported its cash position was $234 million, which the company estimated would last into 2026. At the end of September, Theseus said its cash position was $225.4 million.
Though Theseus previously stated plans to further develop its pipeline, it has since reconsidered. On Nov. 6, Theseus decided to lay off 26 employees, representing about 72% of its staff, the company said in a Monday regulatory filing. The layoffs will lead to $5.5 million in severance costs, which the company expects will be incurred in the current quarter.
Among those losing a job is William C. Shakespeare, the biotech’s president of research and development. Theseus said Shakespeare will continue in a consultative role until June 30, 2024. The company also said it plans to consider “a wide range of options with a focus on maximizing shareholder value.” Those strategic alternatives could include a sale of the company, a merger with another business, or some other transaction, Theseus said.
Theseus’s former lead drug candidate, THE-360, was developed to treat gastrointestinal stromal tumor (GIST), a type of gut cancer driven by mutations to the KIT gene that lead to mutated forms of the KIT kinase. Drugs from the class of medicines called tyrosine kinase inhibitors are available as first- and second-line treatments for GIST, but drug resistance is an ongoing problem. Theseus aimed to overcome resistance by developing “pan-variant” tyrosine kinase inhibitors intended to target the main cancer-causing and drug-resistance mutations. THE-360 was designed to address the various mutations of the KIT kinase.
With the discontinuation of THE-360, Theseus shifted focus to THE-349, a tyrosine kinase inhibitor designed to target mutated versions of a cancer protein called EGFR. Developed as a potential treatment for EGFR mutant non-small cell lung cancer, Theseus stated in its report of second quarter financial results that it planned to submit an investigational new drug application for the molecule in the fourth quarter of this year. The company also indicated it intended to nominate additional drug candidates, including another pan-variant KIT inhibitor for GIST.
Theseus was incubated by OrbiMed and revealed its approach to cancer in 2021, backed by a $100 million Series B financing. Months later, the company completed its IPO, pricing shares at $16 apiece and raising $160 million. On Tuesday, shares of Theseus opened at $3.05, up 42.5% from Monday’s closing price.
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