Cancer Drugmaker iTeos to Shut Down, Highlighting Industry Challenges

In a stark reminder of the challenges facing the biotech industry, cancer drugmaker iTeos Therapeutics announced plans to wind down operations and sell off its assets. This move comes just weeks after the company shelved its most advanced drug prospect, a TIGIT-targeting treatment developed in partnership with GSK.

Financial Implications and Asset Liquidation

iTeos plans to spend up to $24.7 million in severance and layoff costs, with an additional $11.1 million allocated for winding down clinical development activities and terminating leases and contracts. The company expects to complete this process by the third quarter of 2025.

As of March 31, iTeos held $156.5 million in cash and cash equivalents. The company's decision to liquidate assets and intellectual property rights is aimed at maximizing shareholder value in the face of mounting challenges.

Industry-wide Trend of Biotech Dissolutions

iTeos is not alone in its decision to dissolve. Other biotechnology companies, including Cargo Therapeutics and Third Harmonic Bio, have also announced plans to liquidate their assets this year. This trend reflects growing scrutiny from investors, who are increasingly pressuring struggling biotechs to return capital to shareholders after failed development efforts.

Eric Schmidt, an analyst at Cantor Fitzgerald, highlighted the diverging goals of executive teams and investors in the wake of clinical setbacks. He noted that cash raised for specific projects is now being allocated to programs that investors are unwilling to support, leading to calls for liquidation.

iTeos' Development History and Recent Setbacks

iTeos has faced a series of challenges in its efforts to develop successful cancer treatments. In the mid-2010s, the company partnered with Pfizer to develop an immunotherapy, but the pharmaceutical giant returned the rights to development in 2018 as the drug's promise faded.

More recently, iTeos collaborated with GSK on a TIGIT drug for use in combination with cancer immunotherapies. However, testing of this candidate was halted in mid-May after study results failed to show significant delay in tumor progression for non-small cell lung cancer patients. The drug also showed underwhelming responses in patients with other cancers.

Michel Detheux, CEO of iTeos, acknowledged the setback, stating, "We believe the best path forward is to promptly evaluate a full range of strategic alternatives to unlock the value of our assets."