On the bubble, Yumanity announces layoffs of 60% of the staff

Therapeutic Yumanity, a Boston-based clinical-stage biopharmaceutical company, announced major structural changes on Thursday. In addition to the massive layoffs – approximately 60% of its workforce – the company also said it was considering “strategic alternatives” to its financial difficulties, including the possibility of selling or merging.

Yumanity got off to a promising start. Founded in 2014, the company focuses on the discovery and development of treatments for neurodegenerative diseases such as Parkinson’s disease, Alzheimer’s disease, dementia with Lewy bodies and amyotrophic lateral sclerosis (ALS). Immediately, major biopharma players such as biogenic and investors like Sanofi-Genzyme BioVentures have seen the potential in Yumanity’s yeast-based treatments for these diseases.

By 2020, the company’s founders – Tony Coles, Susan Lindquist and Ken Rhodes, all of whom had successful track records in their previous jobs – had led Yumanity to significant milestones. The company has entered into a partnership with Merck & Co. and completed a reverse merge with Therapeutics of proteostasis. After a successful Phase Ib clinical trial of its lead candidate for Parkinson’s disease in November 2021, Yumanity received a $500,000 grant by the Michael J. Fox Foundation for more research on Parkinson’s disease.

But underneath, the company was struggling. Despite successful clinical trials, the Third quarter 2021 reports posted a net loss of $10 million, compared to a net loss of $6.4 million the previous year. In December 2021, it offered incentive grants of non-statutory stock options for purchase. On February 17, the company’s shares had fallen 12% with prices now around $1.55 at press time.

Clinical development issues also quickly emerged. The aforementioned clinical trial in Parkinson’s disease – for which Yumanity had already submitted an Investigational New Drug Application to the United States Food and Drug Administration – has been placed on partial hold in January 2022.

Apparently the pressures have crumbled and have now exploded with the major restructuring and layoffs. Yumanity is laying off about 26 of its 44 employees in a process that will be completed by April. The company also said it is exploring “strategic restructuring” options to preserve capital, including changes that will help reduce expenses while it considers its options. Humanity noted she expects the restructuring process to cost about $400,000. And the long-term solutions? The board said many options are on the table: acquisitions, mergers, reverse mergers, asset sales, product license sales, and more.

As the process progresses, the company seems reluctant to share too much information. Yumanity said it does not expect to disclose developments unless the board decides to do so. Yumanity also noted that the possibility of strategic alternatives such as sales or mergers has no guarantee of success.

This is dire news for the more than 50 million people around the world who suffer from neurodegenerative diseases and hope to be cured. Unfortunately, Yumanity isn’t the only company grappling with potential layoffs and restructuring. Over the past five months, biogenic, vTv, Lundbeck, Hope, Ardelyx and Ziopharm also experienced or were suspected of considering significant layoffs.