Vital Therapies (NSDQ:VTL) yesterday said it plans to lay of 32 employees, or about 30% of its workforce, and slash expenses as it looks to reboot its clinical program after the failure its Elad device in a trial last month.
San Diego-based Vital Therapies halted a Phase III clinical trial of the Elad cell-based treatment for liver failure after it failed to meet its primary and secondary endpoints and shut down 2 other studies. Vital Therapies said it’s still looking at the data from the halted trial and is working on the design for a new Phase III trial.
“As we evaluate our next steps, it is necessary to conserve cash while we continue our analysis of the VTI-208 clinical trial data to possibly support the design and implementation of a new clinical trial to confirm what we believe to be promising pre-defined subset and post hoc analyses,” co-chairman & CEO Terry Winters said in prepared remarks. “This has been a difficult process, but I want to thank each and every one of our departing employees for their hard work, passion and dedication. We will not forget their contributions and we wish them well.”
The 203-patient VTI-208 trial, examining the efficacy of the cell-based therapy in treating subjects with alcohol-induced liver decomposition, found no difference between the control group and those treated with Elad in the primary endpoint of overall survival of at least 91 days. Secondary survival endpoints, at 28 and 91 days, and serious adverse events were also equivalent.
Yesterday Vital Therapies said the layoffs, slated to be complete by the end of the year, are expected to cost $1.2 million during the 3rd quarter, including $900,000 in severance benefits.
The cost reduction from the layoffs, plus the savings from closing the other 2 trials and across-the-board expense cuts, “extended its anticipated cash runway,” Vital Therapies said. When it spiked the trial last month, the company said it believed that the $62 million in cash on hand would be sufficient to fund another trial. Vital Therapies walked that back yesterday, saying it’s looking at “whether current cash will be sufficient to fund all or a major part of a possible new Phase III clinical trial.”
“Sufficiency of current resources will depend on a number of variables, including but not limited to, the extent to which the company can successfully further reduce other expenses, trial design and size, and enrollment rates,” the company said.
VTL shares closed down -4.7% at $3.45 apiece yesterday and slid another -3.2% to $3.34 each in pre-market trading. The shares, which lost more than 79% of their value when Vital Therapies halted the trial, is down -86.2% this year.