Exscientia cuts up to 25% of staff to fund clinical expansion

Exscientia has announced a significant reduction in its workforce, planning to lay off between 20-25% of its employees by the end of the year. This decision is part of the company's strategy to streamline operations and focus on advancing its proprietary drug candidates to clinical stages. Currently, Exscientia is engaged in early-stage testing for two partnered programs. The first, a CDK7 inhibitor known as GTAEXS617, is being developed in collaboration with GT Apeiron Therapeutics to target solid tumors. The second, a PKC-theta inhibitor called EXS4318, which has been in-licensed by Bristol Myers Squibb, is undergoing Phase I trials for inflammatory diseases.

Looking ahead, Exscientia plans to commence trials for its LSD1 inhibitor in the latter half of next year, and for its MALT1-targeting candidate in early 2025. These investigational drugs are aimed at treating specific hematologic malignancies. The anticipated workforce reduction is expected to generate annual savings of $40 million starting next year, impacting staff across various departments, including target identification, precision medicine, experimentation, engineering, and infrastructure. This measure is designed to extend the company's financial resources until 2027.

This restructuring initiative follows a turbulent period for Exscientia. Just a few months ago, the company dismissed its former CEO, Andrew Hopkins, after an investigation revealed inappropriate relationships with two employees. David Hallet, the Chief Scientific Officer who took over as interim CEO in February, commented on the developments. He emphasized that Exscientia is beginning to realize the transformative potential of integrating AI in drug design with comprehensive robotic automation throughout the entire experimental process.

In a separate but similar move, Lyra Therapeutics, a company specializing in sinonasal implants, also announced a round of layoffs. The company intends to let go of 87 employees, which amounts to approximately 75% of its workforce. Lyra Therapeutics will halt all manufacturing and commercialization activities to extend its cash flow until 2026.

These strategic decisions by both Exscientia and Lyra Therapeutics highlight a broader trend in the biotech industry, where companies are increasingly focusing on financial sustainability and operational efficiency amidst challenging market conditions. For Exscientia, the integration of AI and robotic automation represents a significant step toward enhancing its drug development capabilities, even as it undergoes significant organizational changes. Similarly, Lyra Therapeutics’ drastic measures underscore the financial pressures faced by smaller biotech firms and the tough decisions required to navigate an uncertain economic landscape.