A regulatory impasse and the FDA’s cancellation of a meeting to discuss the next steps in a R&D program have prompted Kezar Life Sciences to prepare to lay off staff and explore strategic alternatives.
Kezar had asked to meet with the FDA in the fourth quarter to discuss plans to develop zetomipzomib in patients with autoimmune hepatitis (AIH). The biotech shared phase 2a data on the immunoproteasome inhibitor in AIH in March and got an FDA hold on the program lifted in July. Seeking alignment on the next steps, Kezar proposed meeting with the FDA to discuss a planned registration-enabling study.
The biotech provided an update after the stock market closed Thursday, telling investors that it had been unable to align with the FDA on a potential registrational clinical trial. Kezar added the agency canceled a meeting. Chris Kirk, Ph.D., CEO of Kezar, called the cancellation an “unusual decision” in a statement.
Kezar employees are set to bear the brunt of the situation. The biotech is planning to lay off staff as part of a broader cost-cutting drive. Kezar, which ended last year with 55 full-time employees, is yet to say how many people will lose their jobs, but its comments suggest deep cuts are coming. The company plans to retain employees who are essential for supporting value creation as part of its strategic review.
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Kezar ended September with $90.2 million. The company’s cash and Nasdaq listing are two assets the biotech has to offer potential buyers. Zetomipzomib is another potential bargaining chip, although the deadlock with the FDA suggests the program may only appeal to a company with deeper pockets than Kezar.
According to the biotech, the FDA has requested a standalone study to define the pharmacokinetics of zetomipzomib in individuals with significant hepatic impairment before the next trial in AIH. For its part, Kezar had planned to exclude AIH patients with significant hepatic impairment from its proposed registration-enabling trial. The biotech said the interim study requested by the FDA will delay the program by two years.
Kirk told investors that Kezar lacks the resources to extend the development timeline. Kezar’s CEO also questioned the technical feasibility, medical need and patient burden of the FDA’s requirement for trials to include 48-hour patient monitoring in a clinical research unit.
Shares in Kezar rose 37% to $5.71 in premarket trading.
