Ikena trims Hippo program, halves workforce in new shift

Ikena Oncology is undergoing significant restructuring and facing challenging decisions as it aims to streamline its operations and focus on its most promising projects. The biotech company recently announced substantial layoffs and a strategic shift in its development pipeline, signaling a tough road ahead.

In a regulatory filing on Tuesday, Ikena disclosed that it is laying off more than half of its workforce, reducing its staff by 18 employees. This move follows a previous round of layoffs in January, which saw 35% of the workforce let go. The latest layoffs are expected to incur approximately $1.2 million in expenditures and will be completed in the third quarter. Post-layoffs, around 16 employees are projected to remain with the company.

In addition to the workforce reduction, Ikena is discontinuing the development of IK-930, a TEAD1-selective Hippo pathway inhibitor that was being developed for mesothelioma and epithelioid hemangioendothelioma. This decision comes after the therapy was one of two primary focuses in the company's January reprioritization. The discontinuation of IK-930 was described as a "disappointment" by William Blair analysts, who had anticipated a significant catalyst from the treatment later this year.

The company's focus will now shift solely to IK-595, a molecular glue therapy targeting RAS and RAF mutant cancers. IK-595 is currently in a phase 1 trial, with additional cohorts expected to be added in the latter half of the year. Analysts from William Blair noted that clear single-agent activity for IK-595 would be essential to generate significant interest and improve the company's share value beyond its cash reserves. The analysts also highlighted management's enthusiasm about the potential of IK-595, citing its more straightforward development path and larger market opportunities.

Despite these measures, Ikena is still exploring strategic options to navigate its future. According to the filing, the company is evaluating potential acquisitions, mergers, asset sales, partnerships, or other transactions to enhance its strategic position. Chief Financial Officer Jotin Marango, M.D., Ph.D., emphasized the company's strong cash position, amounting to $157 million as of March 31, which could unlock new strategic opportunities and support parallel partnership potentials for its pipeline.

The reprioritization and discontinuation decisions have been tough but necessary, according to the executives. They pointed out that the limited market opportunity for IK-930 alone and the long timeline required to prove its efficacy in combination regimens were significant factors in the decision to halt its development. In contrast, IK-595 is making faster progress through clinical trials, offering a more promising development path.

Ikena's strategic pivot and workforce reduction underscore the challenges faced by biotech companies in balancing resource allocation, development timelines, and market opportunities. As the company navigates these changes, its leadership remains focused on creating value through multiple avenues and leveraging its financial position to explore new strategic directions.