Encoded Therapeutics Restructures to Prioritize Dravet Syndrome Gene Therapy

Encoded Therapeutics, a gene therapy biotechnology company, has announced a significant restructuring effort to focus its resources on its promising Dravet syndrome program. The company is reducing its workforce by 29% as it shifts its focus away from early-stage research and development activities.

Strategic Realignment and Clinical Progress

Encoded's lead asset, ETX101, is an AAV9-based therapy designed to upregulate the expression of the SCN1A gene in inhibitory neurons. The company hopes this innovative approach could become the first one-time therapy to address the underlying genetic cause of Dravet syndrome, a rare and severe form of epilepsy.

The clinical trial for ETX101 has made substantial progress, with eight infants and children between six months and seven years old having been dosed across the United States, United Kingdom, and Australia. Importantly, no treatment-related adverse events have been reported to date, bolstering confidence in the therapy's safety profile.

Dr. Kartik Ramamoorthi, CEO of Encoded Therapeutics, stated, "Given the significant potential of our portfolio, Encoded is focusing resources on ETX101 and our established programs where we have the greatest opportunity to create near-term value." This strategic decision underscores the company's commitment to advancing its most promising candidates.

Pipeline Developments and Manufacturing Capabilities

While ETX101 takes center stage, Encoded is not neglecting its broader pipeline. The company plans to submit a request to the FDA next year for ETX201, an AAV9-based vectorized microRNA (miRNA) therapy for Angelman syndrome, to enter clinical trials. Additionally, Encoded's preclinical portfolio includes AAV9-based vectorized miRNA candidates targeting chronic pain and Alzheimer's disease.

To support its development efforts, Encoded is preparing to bring its in-house manufacturing capabilities online. The company expects its GMP facility in North Carolina's Research Triangle Park to become fully operational in the first quarter of this year, enabling the production of drug products for all ongoing programs.

Financial Implications and Future Outlook

The restructuring, including the 29% reduction in workforce, is expected to extend Encoded's cash runway into the third quarter of 2026. This move follows a previous 10% staff reduction in 2023, highlighting the company's ongoing efforts to optimize its resources and focus on key value drivers.

With a preliminary efficacy readout for ETX101 scheduled for the second half of this year, Encoded Therapeutics is positioning itself at the forefront of gene therapy development for neurological disorders. The company's strategic realignment reflects a growing trend in the biotech industry of prioritizing advanced-stage assets with the highest potential for near-term success.