By Colin Kellaher
Allogene Therapeutics, a clinical-stage biotechnology company based in South San Francisco, saw a sharp decline in its stock price, dropping over 15% on Friday. The decrease followed the company’s announcement of a new pipeline-prioritization and clinical-development strategy, which includes a significant reduction in its workforce by 22%.
Currently, shares of Allogene are trading at $2.86, representing a nearly 16% decrease.
In its statement released after market close on Thursday, Allogene revealed its plan to focus on the development of its cema-cel drug candidate for first-line treatment in newly diagnosed and treated patients with large B cell lymphoma who are at risk of relapse and require additional therapy. As a result, the company will deprioritize its current third-line studies.
Allogene intends to commence a Phase 2 pivotal first-line study of cema-cel in mid-2024.
Furthermore, Allogene announced its collaboration with privately held Foresight Diagnostics for the development of Foresight’s minimal-residual-disease assay. This assay will serve as an in-vitro diagnostic tool to determine patient eligibility for the study. Allogene will provide approximately $26 million in funding for assay development costs, milestone payments for regulatory submissions, and assay utilization to process clinical samples.
With around 360 employees, according to data from FactSet, Allogene plans to complete the workforce reduction by the end of this month. The company anticipates incurring charges of $5 million to $5.5 million for severance payments and employee benefits.