Pharmaceutical Industry Faces Wave of Layoffs Amid Strategic Shifts and Financial Pressures

The pharmaceutical and biotechnology sectors continue to grapple with widespread workforce reductions as companies realign priorities and navigate financial challenges. Recent announcements highlight the scope of these changes across the industry.

Tempest Therapeutics Cuts 80% of Staff While Exploring Options

Tempest Therapeutics, a California-based biotech, announced it will lay off 21 of its 26 full-time employees as part of a strategic restructuring. The cuts, effective April 30, come as the company explores alternatives to advance its clinical-stage programs and maximize stockholder value.

The restructuring follows Tempest's inability to secure funding for a planned Phase 3 trial of its lead candidate amezalpat, a PPAR-alpha antagonist with FDA orphan drug and fast track designations for hepatocellular carcinoma. The company is now considering mergers, acquisitions, partnerships, and licensing deals to support further development.

Tempest expects to incur approximately $1.5 million in costs related to the workforce reduction, primarily in severance payments. The biotech ended 2024 with $30.3 million in cash and cash equivalents, which analysts noted would only cover initial costs for a Phase 3 trial.

Mural Oncology and Pyxis Oncology Implement Significant Staff Reductions

Following disappointing clinical trial results, Mural Oncology is cutting about 90% of its workforce and pausing all development operations. The company will lay off approximately 104 employees, leaving it with around 11 staff members. The restructuring comes after Mural's lead program, the engineered interleukin-2 variant nemvaleukin alfa, failed to meet primary endpoints in multiple trials for mucosal melanoma and ovarian cancer.

Meanwhile, Pyxis Oncology announced a 20% reduction in its workforce, primarily affecting preclinical and administrative roles. The cuts are part of Pyxis' efforts to streamline operations and focus resources on its lead antibody-drug conjugate programs. This follows a previous 40% workforce reduction in November 2023 after the company acquired Apexigen.

Industry-Wide Trend of Layoffs Continues

The layoffs at Tempest, Mural, and Pyxis are part of a broader trend across the pharmaceutical and biotech sectors. Other recent workforce reductions include:

• Pfizer cutting 210 manufacturing jobs across sites in Ireland
• Novartis laying off 427 employees at its U.S. headquarters in New Jersey
• Gilead Sciences and subsidiary Kite Pharma reducing staff across multiple locations
• Bristol Myers Squibb continuing its strategic productivity initiative, with over 1,100 employees affected in New Jersey alone

These layoffs reflect ongoing challenges in the industry, including pipeline setbacks, increasing competition, and pressure to reduce costs. As companies reevaluate their strategies and resource allocation, further workforce changes are likely in the coming months.