Oric Pharmaceuticals Restructures to Focus on Advanced Cancer Drugs

Oric Pharmaceuticals, a California-based biotech company specializing in cancer therapeutics, has announced a significant restructuring plan to concentrate resources on its two most promising oncology drugs. The move, revealed in the company's second-quarter earnings release, involves laying off 20% of its workforce and eliminating its discovery research group.

Strategic Refocus on Clinical-Stage Programs

Oric's strategy shift centers on accelerating the development of ORIC-944, a polycomb repressive complex 2 (PRC2) inhibitor, and enozertinib (formerly ORIC-114), a brain-penetrant inhibitor targeting EGFR exon 20, HER2 exon 20, and EGFR atypical mutations. The company aims to initiate phase 3 trials for both drugs in 2026, targeting prostate cancer and lung cancer, respectively.

CEO Jacob Chacko, M.D., explained the rationale behind the restructuring: "As our clinical programs have progressed closer to registrational studies, it necessitates that we increase our focus and direct our expenditures solely on those programs." He added that while the decision to reduce investment in discovery research was tough, it was deemed prudent for the company's future.

Promising Clinical Data Drives Decision

Recent data from an ongoing phase 1b study of ORIC-944 has bolstered the company's confidence in the drug's potential. The trial showed that 59% of patients with metastatic castration-resistant prostate cancer experienced a 50% or greater reduction in their prostate-specific antigen level. This data has positioned ORIC-944 as a potential "best-in-class PRC inhibitor," according to the company.

Financial Implications and Future Outlook

The restructuring is expected to extend Oric's cash runway into the second half of 2028. As of June 2023, the company reported $327.7 million in cash reserves, bolstered by a recent $125 million private placement financing completed in May. The workforce reduction is anticipated to result in approximately $1.9 million in termination fees and related costs in the third quarter of 2023.

While streamlining its internal operations, Oric is also exploring potential partnerships for its preclinical programs, signaling a shift towards external collaborations for early-stage research.