Eliem Therapeutics is dropping a depression drug candidate and laying off 55% of staff in an attempt to stretch its cash runway to 2027.
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Eliem Therapeutics is dropping a depression drug candidate and laying off 55% of staff in an attempt to stretch its cash runway, according to a Thursday press release.
The dropped candidate is ETX-155, a novel GABAA receptor-positive allosteric modulator neuroactive steroid that was being studied in major depressive disorder (MDD). Eliem’s stock fell 12 percent as of market open Friday in response to the news.
ETX-155 previously showed promising results in Phase I, and the company was gearing up for a Phase IIa trial set to begin in Q1, 2023. It was also the company’s only candidate in the clinic.
The layoffs seem to be a direct result of the decision to drop the program, as Eliem upped its hiring efforts in 2022 in anticipation of the Phase II trial. The company cited “current capital market conditions and investor sentiment” as the motivator for its decision.
The new strategy is expected to extend the company’s cash runway into 2027 - two years later than it reported in its Q3 2022 report when its resources were set to run out in 2025.
The Kv7 Race to the FDA
The biotech stated it plans to shift its focus to its preclinical Kv7.2/3 program, specifically its lead Kv7.2/3 candidate, ETX-123. Eliem stated the candidate has demonstrated “excellent potency, selectivity, and in vivo anticonvulsant activity,” and a first-in-human Phase I trial is set for the first half of 2024.
Kv7.2/3 is a clinically validated target in both epilepsy and pain. It also has potential in depression disorders, Eliem noted in its press release.
Despite the company’s confidence in ETX-123, it will likely be a rocky road to get to the FDA. There are currently no FDA-approved Kv7.2/3 therapies on the market, though there is some competition in the space.
In early 2022, Biohaven Pharma acquired Channel Biosciences and its Kv7 channel targeting platform. Pfizer’s buyout of Biohaven in October resulted in a new strategy for the latter company with a focus on epilepsy and its Kv7 candidate, BHV-7000, which is currently being studied in a Phase I trial.
However, both Biohaven and Eliem are behind another biotech in the Kv7 race - Xenon Pharmaceuticals. Its candidate, XEN1101, moved into Phase III in November after producing promising results in Phase II.
