eFFECTOR Therapeutics: Oncology Biotech Shuts Down After Midstage Failure

eFFECTOR Therapeutics, an oncology biotech company, is winding down its operations, as announced in a June 24 company release. This conclusion marks a significant transition for the company, leading to the layoff of multiple key employees, including CEO Stephen Worland, Ph.D., Chief Financial Officer Michael Byrnes, and Chief Medical Officer Douglas Warner, M.D., who all ceased their roles at the end of the preceding week.

The company anticipates incurring approximately $600,000 in one-time costs and cash expenditures related to the workforce reduction, as detailed in documents submitted to the Securities and Exchange Commission.

To navigate this transition, the board of directors has appointed Craig Jalbert as the new CEO, president, treasurer, secretary, and sole board member of eFFECTOR. Jalbert, a principal at the accounting firm Verdolino & Lowey, P.C., brings over 30 years of experience in managing company wind-downs.

As part of its next steps, eFFECTOR is exploring strategic alternatives for its development programs. The company's primary asset, zotatifin, is a selective eIF4A inhibitor currently undergoing several mid-stage trials aimed at treating solid tumors.

Earlier in April, eFFECTOR's other wholly-owned asset, tomivosertib, did not demonstrate an improvement in progression-free survival in a phase 2b trial involving patients with non-small cell lung cancer (NSCLC). Based on the comprehensive data from the primary analysis, the company determined there was no clear path forward for the continued development of tomivosertib in frontline NSCLC.

Additionally, eFFECTOR had entered into a partnership with pharmaceutical giant Pfizer for a preclinical asset known as eIF4Ei, which is similarly targeted at solid tumors. This collaboration, valued at up to $507 million in biobucks, began in 2019 when Pfizer provided an upfront payment of $15 million as part of an exclusive licensing agreement to develop small-molecule inhibitors of eukaryotic initiation factor 4E (eIF4E) with eFFECTOR.

eFFECTOR Therapeutics was established in 2012, stemming from research conducted in the University of California, San Francisco laboratories of Davide Ruggero, Ph.D., and Kevan Shokat, Ph.D.

In light of the planned closure, eFFECTOR intends to request delisting from the Nasdaq. The announcement of the company's wind-down has significantly impacted its stock, which plummeted by 77%, dropping from $1.17 per share at the close of the market on Friday to 29 cents per share at the opening the following morning.