Only three months after banking an eye-popping $350 million series D round, Eikon Therapeutics is blaming government funding cuts for its decision to lay off almost 15% of its employees.
California-based Eikon disclosed the decision in a May 21 LinkedIn post, in which the company attributed “external forces” for the move to “part ways with a group of talented, and highly valued, employees.”
As well as working on a suite of clinical-stage drugs, another strand of the biotech’s business involves providing external researchers access to its cell analysis tech and instruments. It is staff in this part of the company that will be impacted by the layoffs, a spokesperson told Fierce.
In the LinkedIn post, Eikon alluded to the impact of a wave of cuts to U.S. federal research funding and infrastructure as a factor in the layoffs.
“To be clear, these decisions were precipitated by external forces,” the company wrote. “For example, government funding cuts have constrained the budgets of academic institutions, necessitating that we pause development of our advanced instruments intended for external researchers.”
“The market for these instruments has clearly evaporated,” Eikon added.
Eikon emerged publicly in 2021 with a stated goal to apply live-cell super-resolution microscopy to drug discovery. Headed up by former Merck & Co. executive Roger Perlmutter, M.D., Ph.D., the biotech went on to secure a series of megarounds, with the most ambitious being a $517 million series B in 2022 and the most recent being the $350.7 million series D in February.
Some of this money has already been used to buy a clinical-stage pipeline of four candidates, led by a toll-like receptor 7 and 8 agonist immune modulator acquired from Seven and Eight Biopharmaceuticals that is now in a phase 3 trial for advanced melanoma.
There’s also a highly selective PARP1 inhibitor acquired from China-based IMPACT Therapeutics that is in a phase 1 trial in patients with breast, ovarian, prostate and pancreatic cancers as well as a central nervous system-penetrant PARP1-selective inhibitor licensed from IMPACT that is about to enter into phase 1 studies for brain cancers.
Eikon’s LinkedIn post referenced “reduced investment in the global biotechnology sector” as requiring the company to “sharpen its focus and generate efficiencies in our operations.” However, a spokesperson confirmed to Fierce that the company’s current pipeline won’t be affected by the layoffs.
The biotech wouldn’t disclose how many staff will be impacted but explained that the workforce changes would be concentrated on “the group exploring the development of advanced instruments intended for external researchers.”
“This action is intended to align Eikon's internal efforts with [its] strategic priorities,” the biotech added. “The company will continue to grow, but will do so in a way that maximizes this alignment.”