Caladrius Biosciences Inc. has cut 40 jobs in Irvine and ended a clinical trial of its lead drug candidate.
New York-based Caladrius develops stem cell therapies for various ailments and was previously known as NeoStem Inc.
It was in a third-phase clinical trial for its CLBS20 compound to treat metastatic melanoma, a form of skin cancer, when it announced this month that it would pull the plug on the program.
The company is taking a $1 million restructuring charge in the quarter related to the Irvine cuts and estimates that there will be a future salary expense reduction of about $4 million, plus an unspecified research and development reduction.
Caladrius plans to maintain its presence in Orange County, according to executives.
“While our operations in Irvine will be significantly reduced due to the strategic decisions taken, we will retain a core staff there to support our continuing development programs,” said Chief Executive David Mazzo through a spokesperson. Mazzo, who’s not related to OC-based healthcare executive Jim Mazzo, didn’t elaborate on how many people would remain in Irvine.
Caladrius gained its Orange County presence through its 2014 acquisition of California Stem Cell Inc., a deal potentially worth $124 million.
California Stem Cell was established in 2005 and run by Hans Keirstead, a pioneer in the county’s stem-cell industry who previously was a professor at the University of California-Irvine. He stayed on with Caladrius and serves as the company’s chief science officer.
Caladrius said the trial of its melanoma drug was halted because the company didn’t believe CLBS20 could sufficiently distance itself from alternative treatments for third- or fourth-stage metastatic melanoma. Metastatic melanoma treatment was transformed last year by the accelerating adoption of drugs known as multiple immune checkpoint inhibitors used by themselves or in combination with other drugs, according to Mazzo.
“These new drugs have significantly improved outcomes in metastatic melanoma and therefore have altered the opportunity for a monotherapy such as CLBS20 in a landscape that is quickly converting to combination therapies,” Mazzo said.
CLBS20
Caladrius said it plans to search for a strategic partner to look at CLBS20 as a combination therapy for metastatic melanoma or possible other cancer treatments.
“Since the current trial was designed with CLBS20 as a single agent, it would not fit with what is expected to be the standard of care at the time,” analyst Robert LeBoyer of New York-based Aegis Capital Corp. said in a client note. “This would make the current trial inconclusive and have little clinical or commercial value.”
Analyst Yi Chen of New York-based H.C. Wainwright and Co. said it’s “unfortunate to have a late-stage trial terminated abruptly, in our view, but it may nevertheless be necessary from a strategic perspective and enables the company to cut loss and lower future cash burn.”
Caladrius is now focusing development efforts on CLBS03, a T-regulatory cell therapy candidate for which it plans to start a second phase clinical trial in teenagers with Type 1 diabetes.
It also said it’s moving resources to PCT, an Allendale, N.J., subsidiary that provides manufacturing and development services for stem cells.
Caladrius, which had a recent market value of $35.1 million, lost $47.7 million on revenue of $14.9 million in the first nine months of last year. The company has said it projects revenue of $23 million in 2015 but hasn’t set a date for its release of full-year financial results.
