Acelyrin is in the rough.
The drug developer that deployed a strategy of in-licensing or acquiring “diamonds in the rough” is now facing a harsh reality and halting most plans on its lead late-stage asset izokibep, scrapping an earlier-stage experimental medicine and laying off 33% of its workforce, according to a quarterly update announced post-market on Tuesday. Acelyrin had 130 full-time employees as of March 15 and about 40 staffers will be impacted, recently-appointed CEO Mina Kim told Endpoints News.
Acelyrin is now zeroing in on one drug that it hopes will enter Phase 3 testing early next year: the injectable lonigutamab for thyroid eye disease. It hopes to compete with Amgen’s Tepezza in the autoimmune eye disease, which has also attracted R&D investment from a crowded field of other biotechs like argenx, Immunovant, Viridian and others.
The moves come amid a shape-shifting moment for the company. Three months ago, the Los Angeles-area biotech’s CEO suddenly departed with little explanation. Prior to her exit, Shao-Lee Lin had been slated to receive the industry’s biggest compensation package of the year, at least on paper, according to an Endpoints data analysis earlier this summer.
Mina Kim“It was a mutual decision and one where a lot of young companies, as they mature and transition, those kinds of transitions happen. It was mutual,” Kim said in a Tuesday interview. “Shao-Lee built this company. We all came to work for her, including me and the folks in this room. She’s left us in a really great place with a strong balance sheet and programs that we continue to believe in.”
The shrunken pipeline and workforce overhaul mark a major pullback for a company that secured the largest biotech IPO of the past few years. Acelyrin reeled in more than half a billion dollars in May 2023 to fund its strategy, which was similar to the buy-and-build blueprint of its executives’ previous employer, Horizon Therapeutics. Acelyrin is trailing Horizon, now owned by Amgen, in trying to bring a TED treatment to market.
Less than half a year after going public, Acelyrin ran into clinical development hurdles last fall with the failure of a Phase 2b/3 study in the chronic inflammatory condition known as hidradenitis suppurativa, or HS. Acelyrin then said that its contract research partner had notified EU regulators of trial execution errors in a separate study of izokibep, an IL-17 inhibitor. The CRO Fortrea has said it “disputes the accuracy” of Acelyrin’s statements.
Pulling back
The moves are “something that we have been talking about since I took the role in May,” Kim said in an interview. “We were going to wait for this data readout and then make decisions, and that’s what we’ve done.”
The drug developer will suspend new investment in izokibep in psoriatic arthritis and HS, even though Acelyrin said Tuesday the drug passed the primary endpoint in a Phase 3 in HS. The company said it will complete the ongoing trials in those indications, as well as a Phase 2b/3 in uveitis, which is slated to have a primary endpoint readout in the fourth quarter. Kim also confirmed the company won’t advance plans for the drug in axial spondyloarthritis, a condition that it had not previously tested izokibep in but for which it had planned to meet with the FDA to discuss a Phase 3.
Acelyrin snagged the rights to izokibep for certain territories from Affibody. The licensing deal was announced in conjunction with a $250 million Series B in November 2021.
Kim said in a statement that the data so far for izokibep “support a path to approval” but a “program of this breadth and size is best brought to market by a larger organization with the resources and existing footprint in these indications.” Novartis’ Cosentyx secured a label expansion for HS last fall, and other drugmakers are advancing work in the condition, including AbbVie, whose blockbuster drug Rinvoq is in Phase 3 for the chronic skin disease.
Acelyrin will also stop work on its anti-c-Kit program known as SLRN-517. Kim described it as a “super-early program” with some healthy volunteer data. Versant-backed Santa Ana Bio disclosed a $125 million Series B in June with a lead program that targets c-Kit on mast cells.
SLRN-517 and lonigutamab came to Acelyrin by way of its acquisition of ValenzaBio in January 2023. At the time, Acelyrin said SLRN-517 could be a treatment option for chronic urticaria, a “potentially greater than $2.5 billion estimated market opportunity.” In TED, where it’s now placing most of its bets, the estimated market opportunity is more than $4 billion, Acelyrin said at the time of the January 2023 deal disclosure.
On Tuesday, the company said it had about $635.2 million in cash, equivalents and short-term marketable securities at the end of June, which it said would keep the lights on into mid-2027. Prior to the cutbacks, it had expected runway “into 2026,” according to a May 9 update.