Shockwave through biotech: AN2 Therapeutics slashes workforce after trial fails

AN2 Therapeutics, Inc., a pioneering force in novel small molecule drugs, has announced a dramatic reduction of its workforce by approximately 50%. This decision follows the discontinuation of its phase 3 clinical trial for epetraborole in treating refractory MAC lung disease, which did not meet several key secondary endpoints.

As of late February, AN2 Therapeutics employed 41 individuals across various departments, including clinical operations and research​. The decision to halve the workforce is expected to be completed by the end of 2024, with Chief Medical Officer Paul Eckburg scheduled to leave by August 30. Despite his departure, Eckburg will continue to offer consulting services to the firm for up to a year following his exit​.

The restructuring is linked to a strategic pivot towards AN2’s boron chemistry platform, which shows promise in the fields of infectious diseases and oncology. Eric Easom, the co-founder, chairman, president, and CEO of AN2, emphasized the company’s renewed focus on accelerating R&D efforts within these domains, citing several promising programs currently in development​.

This workforce reduction is part of a broader initiative to conserve operational capital and realign the company’s resources towards its ongoing strategy. The layoffs are projected to incur aggregate charges of approximately $2 million to $3 million, which includes severance and other related expenses.

The decision comes in the wake of the EBO-301 study’s failure to demonstrate significant differences in sputum culture conversion between the treatment and placebo arms, despite achieving its primary objective of validating a new patient-reported outcome (PRO) tool. The observed clinical response rate in the epetraborole plus optimized background regimen (OBR) arm was 39.5%, compared to 25.0% in the placebo plus OBR arm. However, the similarity in sputum culture conversion rates, a crucial secondary endpoint, was pivotal in the company’s decision to halt the trial and reassess its future directions.

With these changes, AN2 Therapeutics aims to extend its operational runway through 2027, optimizing its financial resources to focus on more promising areas of research. The company’s strategic realignment underscores its commitment to innovating within the biopharmaceutical industry, despite the setbacks faced in its recent clinical endeavors​.