Former high-flying I/O biotech shelves lead drugs, chops staff and hands off the remnants in Nasdaq reshuffle

Bioregnum Opinion Column by John Carroll

If there’s one lesson that shines through in the retrenchment going on now in biotech, it’s that no great startup story — regardless of its distinguished scientific founders, the deep-pocket investors who launched the company, or the blue-chip look of its IPO — can survive without solidly positive human data.

And the blight of disappointing data has now afflicted another former high flyer in the immunotherapy field.

In a day that saw repeated instances of biotech restructurings, Jounce Therapeutics has thrown in the towel, opting to cut out two key programs while handing over early-stage research and $130 million in cash to the team at the UK’s Redx, which will take over the Nasdaq listing.

Founded by Third Rock, which has been focused on chopping out the deadwood in recent months, Jounce enjoyed the scientific insights of Nobel Prize winner Jim Allison and fellow MD Anderson immunotherapy expert Padmanee Sharma (who’s also Allison’s wife). But after the market closed on Wednesday, the biotech revealed that it is putting its former lead drugs on the discount shelf.

The Redx news arrived separately a few hours later as the UK drug developer mapped out a runway that extends to H2 of 2025 with a ROCK2 inhibitor, RXC007, now in the lead. Forty-seven Jounce staffers in Massachusetts will now flip to the Redx team as their whole clinical effort is put on ice.

Almost exactly 10 years after its public debut, Jounce $JNCE got the two-step exit in play by putting out word that it was restructuring and laying off more than half its staff. Jounce ended 2021 with 137 staffers. JTX-8064 and vopratelimab, a two-time loser in the clinic, are being shelved and put up for grabs after the data failed to pain out.

In a statement, Jounce noted that ‘8064 and vopratelimab “requires funding and a scope that the company cannot pursue on its own and will be seeking business development opportunities for both programs.”

Richard Murray

“We believe data in both the SELECT and INNATE clinical trials is intriguing, but to date neither study has demonstrated clinical activity sufficient to create the value necessary for Jounce to independently advance these programs to the next stage of development,” said CEO Richard Murray, who held out hope that another company with more money to invest would make a go of it.

It’s a long shot at best, though. Last August, the company conceded defeat on its second mid-stage study of the ICOS-targeting vopratelimab, which had attempted to find redemption with a more targeted approach on patients.

Jounce is still describing ‘8064 — a LILRB2 (ILT4) receptor antagonist — as its most important program in its latest PR. Like a variety of cancer biotechs, the founders had also put stock in their own PD-1, pimivalimab, which follows a host of predecessors like Keytruda that long ago locked up blockbuster status.

Back in 2016, the Celgene team went deep on Jounce, signing a $2.6 billion alliance (sweetened with $261 million in cash) with the biotech. But they sliced it back to rights on ‘8064 in 2019, just ahead of the Bristol Myers Squibb buyout. Bristol Myers already had its own PD-1, Opdivo, and an ICOS program to boot. And a year later BMS punted ‘8064 as well.

Trouble signs had already cut the one-time biotech star down to a shadow of its former market valuation, with shares hovering around the penny stock borderline. Late last year, Gilead bought out the remaining rights to their anti-CCR8 antibody GS-1811 for $67 million in cash, with Jounce forfeiting $645 million in milestones.

Shares of Jounce bumped to $1.20 after the bell. The company went public six years ago at $16 a share and quickly gyrated higher.

therapeutics
immunotherapy
biotech
shares
nasdaq