Viracta Therapeutics Shuts Down Operations, Laying Off All Employees

Viracta Therapeutics, a San Diego-based cancer biotech company, has announced the closure of its operations and the termination of all employees. The decision, approved by the company's board on February 3, 2025, marks the end of Viracta's pursuit of precision oncology treatments.

Leadership Changes and Wind-Down Process

In conjunction with the shutdown, Viracta has undergone significant leadership changes. CEO and President Mark Rothera, along with CFO Michael Faerm and Chief Medical Officer Darrel Cohen, M.D., Ph.D., have stepped down from their positions. The board has appointed Craig Jalbert, principal of accounting firm Verdolino & Lowey, as the new CEO to oversee the wind-down process. Jalbert will receive an annual compensation of $50,000 for three years for his role in managing the company's closure.

Financial Implications and Strategic Alternatives

The company anticipates a one-time payment of $100,000 associated with the workforce termination. As part of the wind-down process, Viracta is actively seeking potential strategic alternatives for its development programs. This move comes after a series of setbacks, including the company's delisting from Nasdaq on February 4, 2025, due to non-compliance with the $1-per-share minimum requirement.

Recent Clinical Trials and Company Struggles

Viracta's closure follows a tumultuous period marked by clinical trial closures and staff reductions. In early January, the company halted its phase 2 lymphoma trial to explore strategic alternatives. This decision came after a series of workforce reductions, including a 42% staff cut in late 2024 to prioritize funding for its lead program.

The company's lead program focused on a combination therapy of the HDAC inhibitor nanatinostat and the antiviral valganciclovir. In August 2024, Viracta reported phase 2 data for this combination in patients with Epstein-Barr virus (EBV)-positive peripheral T-cell lymphoma (PTCL). The study showed overall and complete response rates of 33% and 19%, respectively, with improved results in second-line patients. Despite these promising results, the company's financial struggles ultimately led to its closure.