Rallybio Scales Back Preclinical R&D, Monopar Shifts to Radiopharma for Funds

The financial strain on biotech companies is forcing them to re-evaluate their investment strategies. Rallybio and Monopar are two such companies adjusting their plans to extend their limited resources. Rallybio is halting its preclinical investments, while Monopar is shifting its focus to radiopharmaceuticals.

Rallybio has been through significant changes over the past 14 months. The company decided to abandon its lead candidate in favor of a second-generation asset within the same therapeutic area. Although this new candidate promises easier delivery and manufacturing, the transition has delayed its progress towards a registrational trial. To conserve resources for its leading program, Rallybio has reduced its workforce by 45% as of February. In its first-quarter earnings report, the company announced it would stop investing in its preclinical pipeline. Rallybio remains optimistic about the potential of its candidates and will seek external funding, such as partnerships, to advance them.

The preclinical pipeline for Rallybio includes RLYB332, a long-lasting variant of RLYB331, an anti-Matriptase-2 antibody. Rallybio plans to present nonclinical data on this candidate, which it believes could be a top-notch treatment for diseases caused by iron overload, in the latter half of the year.

Monopar, on the other hand, has completed its pivot to radiopharmaceuticals. Initially, radiopharmaceuticals were not part of Monopar's strategy when it went public in 2019. However, the potential of a preclinical anti-uPAR antibody led to a strategic shift. By linking the antibody to radioisotopes, Monopar has established a radiopharmaceutical program, offering both imaging and therapeutic possibilities. Consequently, Monopar is discontinuing non-radiopharma assets, including the Phase 1b cancer candidate camsirubicin. As of the end of March, Monopar reported having just under $9 million, enough to sustain operations until at least the following summer. During this period, Monopar intends to continue human studies of its imaging asset and progress its first therapeutic radiopharmaceutical into clinical trials.

Despite Monopar's stock price rarely exceeding $1 over the past year, the company has highlighted recent acquisitions in the radiopharma sector by major players like AstraZeneca, Bristol Myers Squibb, Eli Lilly, and Novartis, each exceeding $1 billion, to remind investors of the sector's potential.

Meanwhile, RAPT Therapeutics is facing setbacks with two phase 2 trials recently put on hold by the FDA. In its first-quarter earnings report, RAPT disclosed that it would close and unblind a phase 2a study testing zelnecirnon in asthma patients and a phase 2b study in atopic dermatitis patients. The clinical hold followed a severe adverse event: a patient in the atopic dermatitis trial experienced liver failure, necessitating organ transplantation. This adverse effect was potentially linked to zelnecirnon. Despite these challenges, CEO Brian Wong, M.D., Ph.D., expressed confidence that sufficient data would be available to determine the drug's future. RAPT aims to finish analyzing the data by the third quarter of the year while continuing to investigate the adverse event.

In summary, biotech companies like Rallybio and Monopar are realigning their strategies to cope with financial constraints. While Rallybio is cutting back on preclinical investments, Monopar is embracing radiopharmaceuticals. RAPT Therapeutics, dealing with clinical holds, is working to understand the implications of adverse events in their trials.