Earlier this week, Aravive, a late-stage oncology company creating targeted therapies for advanced metastatic diseases, announced this week that it would be letting go of approximately 70% of its existing workforce.
The decision came on the heels of the phase 3 AXLerate-OC trial results, where the investigational drug batiraxcept failed to meet its primary endpoint of progression-free survival for platinum-resistant ovarian cancer patients. The trial also showed no distinction in outcomes across the broader patient population, including those who had previously undergone bevacizumab treatment.
The company's lead pipeline asset, batiraxcept is an ultra-high affinity decoy protein that binds to GAS6 and thereby prevents AXL signaling to inhibit metastasis and tumor growth and restore sensitivity to anti-cancer agents. The treatment has been granted Fast Track Designation by the U.S. FDA for both clear cell renal cell carcinoma and platinum-resistant ovarian cancer and Orphan Drug Designation for pancreatic ductal adenocarcinoma.
In an effort to navigate the financial challenges that lay ahead, Aravive’s board of directors gave the green light to the layoffs. Aravive estimates that severance payments to departing employees will amount to about $900,000. Additionally, there's an expected expenditure of $300,000 to cover previously accrued paid time off. These financial outlays, totaling around $1.2 million, are anticipated to be mainly disbursed during the third quarter of fiscal year 2023.
As the biotech grapples with these changes, it is actively exploring strategic alternatives to secure its future. These alternatives include seeking strategic partners or financing opportunities. But if Aravive doesn't secure the necessary capital or establish a strategic partnership promptly, it could be forced to halt its operations, liquidate its assets, and potentially enter bankruptcy proceedings.
Other biotechs like Illumina and Atreca have recently announced layoffs as well. Illumina, a market leader in DNA sequencing equipment and has approximately 10,000 employees, also decided to close its San Diego facility.