BenevolentAI lays off 30% of staff, exits US site as funding gap looms
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Source: FierceBiotech
BenevolentAI said the changes will extend its cash runway into late in the third quarter of 2025.
The cuts keep coming at BenevolentAI. Eleven months after restructuring, the AI-enabled drug developer is pulling another pivot, axing plans to launch software products, laying off another 30% of staff and closing its U.S. office.
BenevolentAI last reset in May 2023, when it laid off up to 180 staff, reduced its lab footprint, paused some programs and dropped its lead candidate in the aftermath of the failure of a midphase eczema clinical trial. The biotech exited the restructuring focused on two business units: an AI software product group and a drug development wing.
Tuesday, BenevolentAI shifted gears again. The group focused on software products, which the biotech calls “Knowledge Exploration Tools,” is bearing the brunt. Last month, BenevolentAI told investors it had completed initial product development and most user testing and was assessing the market.
The assessment persuaded BenevolentAI to stop work on the software “given the investment needed to fully commercialize this [software-as-a-service] product and the estimated timeframe to see a potential meaningful financial return.” BenevolentAI sees its drug discovery collaborations and in-house pipeline as a better use of the money.
As part of the changes, the biotech is laying off 30% of staff. BenevolentAI ended (PDF) last year with 248 employees, a figure that reflected the 30% headcount cut made in 2023. The figures suggest the latest layoffs will affect tens of people.
BenevolentAI is funneling some of the cash saved through the actions into development of BEN-8744, a PDE10 inhibitor for ulcerative colitis. The biotech is preparing to take the candidate into phase 1b/2a trials. Factoring in extra investment in BEN-8744, BenevolentAI estimated the changes will reduce cash burn by around 20% and extend its cash runway into late in the third quarter of 2025.
The runway is an improvement over the mid-2025 forecast BenevolentAI shared with investors in March but could still pose problems for the biotech. Investors have soured on the company, causing its share price to languish below 1 euro ($1) for much of 2024 and limiting its ability to raise money. BenevolentAI expects milestones to add to its cash in 2026 and beyond, but the runway stops short of those paydays.
To bridge the gap, the biotech is aiming to enter into one or more collaborations and out-license at least one pipeline program this year. BenevolentAI is partnered with AstraZeneca, Eli Lilly and Merck KGaA. The company will retain “key skills, experience and capabilities” and maintain its ability to support new and existing collaborations after the latest layoffs.
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