Kezar Life Sciences Faces Setback as FDA Cancels Meeting, Prompting Layoffs and Strategic Review

Kezar Life Sciences, a biotechnology company focused on developing treatments for autoimmune diseases, has encountered a significant obstacle in its development program for zetomipzomib, leading to plans for staff reductions and a strategic review of the company's operations.

FDA Cancellation and Regulatory Impasse

The U.S. Food and Drug Administration (FDA) has canceled a crucial meeting with Kezar Life Sciences, originally scheduled for the fourth quarter of this year. The meeting was intended to discuss the next steps in the development of zetomipzomib, an immunoproteasome inhibitor being studied for autoimmune hepatitis (AIH). This cancellation has created a regulatory impasse, with Kezar unable to align with the FDA on a potential registrational clinical trial.

Chris Kirk, Ph.D., CEO of Kezar, described the cancellation as an "unusual decision" in a statement to investors. The company had previously shared phase 2a data on zetomipzomib in AIH in March and successfully had an FDA hold on the program lifted in July.

FDA Requirements and Program Delays

According to Kezar, the FDA has requested a standalone study to define the pharmacokinetics of zetomipzomib in individuals with significant hepatic impairment before proceeding with the next trial in AIH. This requirement is expected to delay the program by approximately two years.

Kezar had initially planned to exclude AIH patients with significant hepatic impairment from its proposed registration-enabling trial. The company's CEO has questioned the technical feasibility, medical need, and patient burden of the FDA's requirement for trials to include 48-hour patient monitoring in a clinical research unit.

Company Response and Strategic Alternatives

In response to these developments, Kezar Life Sciences has announced plans to implement cost-cutting measures, including staff layoffs. While the exact number of job cuts has not been disclosed, the company has indicated that the reductions will be significant. Kezar, which reported 55 full-time employees at the end of last year, plans to retain only those employees essential for supporting value creation during its strategic review.

The company ended September with $90.2 million in cash reserves. As part of its strategic review, Kezar is exploring alternatives, potentially including the sale of the company or its assets. The company's cash position, Nasdaq listing, and the zetomipzomib program are among the assets that could be of interest to potential buyers, although the current regulatory challenges may impact the program's appeal.