Pharmaceutical Industry Faces Setbacks and Strategic Shifts

In a series of developments that underscore the volatile nature of the pharmaceutical industry, several companies have announced significant changes to their operations and drug development programs. From layoffs and pipeline adjustments to new partnerships and regulatory alignments, these updates reflect the ongoing challenges and opportunities in the sector.

Keros Therapeutics Halts Key Program and Cuts Workforce

Keros Therapeutics has made the difficult decision to discontinue the development of its lead drug candidate for pulmonary arterial hypertension. The company announced on Thursday that it would cease all dosing in the Phase 2 study of cibotercept following observations of dangerous fluid buildup in participants. This setback has led to a substantial restructuring, with Keros laying off 45% of its staff, reducing its workforce to 85 full-time employees. The move is expected to save the company approximately $17 million annually as it reassesses its development strategy for cibotercept and other programs in its pipeline.

FDA Decisions Shape Future for Stealth and Taysha

The Food and Drug Administration (FDA) has played a pivotal role in recent developments for two biotechnology companies. Stealth Biotherapeutics received a rejection for its drug elamipretide, intended to treat the rare Barth syndrome. However, the FDA has provided a potential path forward, agreeing to consider the drug's effects on muscle strength as an "intermediate clinical endpoint" that could support accelerated approval. In response, Stealth plans to submit new data but will also reduce its workforce by 30% to conserve resources.

Meanwhile, Taysha Gene Therapies has successfully aligned with the FDA on the design of a pivotal study for its gene therapy targeting Rett Syndrome. The single-arm, open-label trial will involve approximately 15 participants and assess developmental milestones over a one-year period. Taysha has secured about $200 million in gross proceeds through a stock offering to support this initiative, with the study set to commence in the third quarter.

Strategic Shifts and New Partnerships

PepGen has announced a significant change in its research focus, terminating all ongoing studies in Duchenne muscular dystrophy after disappointing early-stage results for its oligonucleotide drug. The company will now concentrate its efforts on an experimental treatment for myotonic dystrophy type 1, with Phase 2 study results expected early next year.

In a move to bolster its oncology portfolio, Astellas Pharma has entered into a partnership with China-based Evopoint Biosciences. The Japanese pharmaceutical giant will pay $130 million upfront for the rights to XNW27011, an antibody-drug conjugate targeting the Claudin 18.2 protein for cancer treatment. This deal, which could potentially exceed $1 billion with milestone payments, complements Astellas' existing Claudin 18.2-targeting drug, Vyloy, and underscores the growing interest in this therapeutic approach despite recent setbacks in the field.