Encoded Therapeutics, a well-funded CNS gene therapy maker, lays off 10% of staff 

Already two years behind initial projections for a Phase I of its lead gene therapy, well-funded Encoded Therapeutics is conserving cash to stay afloat into 2026, business chief David McNinch confirmed in an email to Endpoints News.

David McNinch

The South San Francisco-based biotech, which last disclosed a $135 million Series D in the summer of 2020, has laid off 10% of its workforce, McNinch said, confirming a Fierce Biotech report. He declined to disclose how many employees were impacted. The biotech has 195 employees, per data from PitchBook.

Encoded follows multiple other gene therapy biotechs that have been saddled by a more discriminating and scrutinous financing environment for drug developers, as some have reduced headcount and prioritized their pipelines or shut down.

At the time of the Series D financing in 2020, Encoded, which focuses on CNS diseases in children, said it would bring its lead gene therapy for SCN1A+ Dravet syndrome into the clinic in 2021. An entry on the US federal trials database says the AAV9-based therapy for infants and children would start the study in December of last year. That appears to have yet to occur, and McNinch said the startup would disclose clinical updates later this year.

McNinch said “the uncertainty of the economic environment” was one of the key factors for the layoffs. The biotech has also said it plans to go beyond one-time treatments for CNS disorders and into liver, metabolic and cardiovascular diseases.

With runway into 2026, McNinch added that Encoded expects to have clinical proof-of-concept for the gene therapy in Dravet syndrome, a genetic epilepsy that can last a lifetime and causes disturbances to movement and balance, sleep and other daily activities. Stoke Therapeutics, which is making an antisense oligonucleotide for Dravet syndrome, has said it plans to enter a pivotal study for its own therapy next year, pending mid-stage results that are expected this summer.

A who’s who of investors has signed onto the biotech since its incubation out of Illumina Accelerator. GV, Venrock, ARCH Venture Partners, Illumina Ventures, RTW Investments, Matrix Capital Management, Farallon Capital Management, SoftBank Vision Fund 2 and others have contributed to the company’s financing to date.

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