Picking up the pieces after lead drug imploded, Rafael Holdings gives up on early R&D in favor of deals
16 Nov 2022
Executive ChangePhase 3
In the months since Rafael Holdings’ lead drug flunked two Phase III trials — in metastatic pancreatic cancer and acute myeloid leukemia — the little biotech has vowed to carry on with an early-stage pipeline.
But the execs in charge are now cutting that off, too.
Rafael will curtail its early-stage efforts, including preclinical research, the company disclosed, in a move to reduce spending and focus on finding clinical-stage programs from outside that it could potentially invest in, acquire or in-license.
UPDATED: Rafael Holdings guts its top leadership, including short-tenured CEO, as cancer fiasco spurs a shakeup
The company wrote in an SEC filing that the move is expected to “incur severance charges in the amount of approximately $0.5 million,” but didn’t specify how many employees may be laid off.
Shares on NYSE $RFL traded up slightly after hours to pass the $2 mark, a fraction of its peak last summer, when it was trading close to $63.
Preview
Source: Endpts
Ameet Mallik
Rafael Holdings had placed high hopes on devimistat, which was originally developed through its subsidiary Rafael Pharmaceuticals. The drug was designed to target enzymes in cancer cells’ mitochondria, thereby cutting off their energy. In fact, it was so promising that Rafael Holdings wooed Ameet Mallik from Novartis Oncology to become CEO.
Preview
Source: Endpts
Bill Conkling
The disappointing Phase III results, announced a year ago, triggered a major shakeup at the top of the company. As Mallik returned the reins to founder Howard Jonas, Rafael Holdings bid farewell to a number of top execs, including then-chief commercial and business officer Bill Conkling — before later announcing that Conkling will actually remain with the company and take up the CEO role.
Under Conkling, Rafael has sold a building in New Jersey, complete with a garage, for $33 million in cash. That added to its reserves of about $63 million as of July 31.
Small biotech whiffs badly in PhIII pancreatic cancer study, prompting halt of another late-stage trial
In a statement, Conkling said the “strong balance sheet affords us the opportunity to focus on strategic business development efforts at a time of substantive dislocation in the biotech sector,” with an eye on programs that are near clinical milestones.
Rafael Pharmaceuticals, meanwhile, is still developing devimistat for several rare cancer types under a new name, Cornerstone Pharmaceuticals.
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