Homology ends genetic medicines development, flashes ‘for sale’ sign, lays off 87%

Gene editing and gene therapy maker Homology Medicines is letting go nearly all of its staff, ending clinical development and searching for a buyer or other business exit, the Massachusetts biotech said after Thursday’s closing bell.

It marks another pullback for the field of publicly-traded gene therapy biotechs, following a similar move by Avrobio two weeks ago.

Homology will stop further development of its pipeline, which includes a gene editing program in the rare metabolism disorder phenylketonuria, or PKU, as well as gene therapies for PKU and a lysosomal storage disorder known as Hunter syndrome. Avrobio had also been exploring a gene therapy for certain forms of Hunter syndrome.

Another former PKU biotech, Rubius Therapeutics, dissolved this year.

With Avrobio’s focus now on finding a buyer, reverse merger, strategic partner or some other transaction for its assets, Homology will reduce headcount by 87%. That equates to about 80 employees, including medical chief Julie Jordan and commercial chief Michael Blum. The board approved the strategic alternatives hunt and workforce reduction on Tuesday, per a Thursday SEC filing.

Homology had about $150 million at the end of March, which gives it runway into 2026 and could be an attractive amount of money for private biotechs seeking a Nasdaq-listed company to take over. Reverse mergers are on the rise this year due to the difficult financing environment and cooled IPO market, with such mergers announced in recent weeks and more expected.

TD Cowen will serve as Homology’s financial advisor, and the biotech will continue monitoring patients in its clinical trials.

Albert Seymour

“We are pleased with the initial data from the first dose level in our PKU gene editing trial, which support dose-escalation; however, given today’s tough financing conditions and the expected clinical development timeline for HMI-103, we believe the best path forward for our shareholders is to evaluate all strategic options for the Company and our pipeline,” CEO and president Albert Seymour said in a press release.

Thursday’s news caps a journey of clinical roadblocks, a reneged Big Pharma deal and a leap into the capital-heavy world of AAV manufacturing.

Homology had partnered with Novartis in 2017 but the Swiss drugmaker backed away in 2021 and returned a gene editing ophthalmology program. Like BioMarin, Homology also ran into clinical trial hurdles for its PKU gene therapy for multiple months in 2022 and ended up laying off about 10% of workers last August. In early 2022, Homology had also sold off an 80% stake in its AAV manufacturing business to Oxford Biomedica Solutions.

Rising out of 5AM Ventures in the mid-2010s, Homology had brought aboard a who’s who of biotech investors in the build up to its March 2018 IPO, reeling in ARCH, Deerfield, Vida, Novartis, Temasek and others to fuel its work. The biotech was based on findings out of City of Hope researcher Saswati Chatterjee.

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