Cambridge's Eleven Bio Pink Slips 70% of Workforce in Restructuring

Cambridge's Eleven Bio Pink Slips 70% of Workforce in Restructuring June 23, 2016
By Alex Keown, BioSpace.com Breaking News Staff

CAMBRIDGE, Mass. – On the heels of a $270 million deal with pharma giant Roche earlier this month, struggling Eleven Biotherapeutics announced it will eliminate 14 positions, approximately 70 percent of its workforce, in a restructuring strategy in an effort to keep moving forward with its eye therapies.

In a filing with the U.S. Securities and Exchange Commission, Eleven said it anticipates the restructuring to be completed later this year, with total costs of about $900,000. In a statement the company said it will continue to review how the restructuring will impact the company regarding additional costs and financials. Eleven said it will provide updates if necessary.

There was no information provided about which departments of the company would be hardest hit by the layoffs, but with a 70 percent workforce reduction, it is likely all areas of the company were hit.

Eleven Biotherapeutics’ stock dipped during trading on Wednesday, closing at $2.33 per share. But showed a spark in after-market trading, hitting $2.45 per share Wednesday night.

For the past year, Eleven Biotherapeutics has struggled with the failure of two experimental therapies. On Jan. 10, the company announced that its Phase III clinical trial of EBI-005 (isunakinra) for severe allergic conjunctivitis did not meet its primary endpoint. That was the second time EBI-005 failed to live up to expectations. In May 2015, the company reported that EBI-005, this time being studied for the treatment of moderate to severe dry eye disease, failed to prevent damage to the cornea or reduce eye pain in comparison to the control group.

With its failed drug trials, Eleven Biotherapeutics’ stock has struggled, to say the least. Since the January failure of EBI-005, shares of Eleven have struggled to rise above $1 per share, earning the threat of delisting from Nasdaq on March 3. The notice was issued after the stock fell below $1 per share and did not meet the $5,000,000 minimum stockholders’ equity requirement.

Earlier this month, the company saw a glimmer of hope with the Roche deal to develop Eleven’s experimental EBI-031 treatment for eye-related diseases, such as diabetic macular edema and uveitis.

Under the agreement, Eleven will be entitled to an upfront payment of $7.5 million, along with potential future milestone payments of up to $262.5 million. The first potential future milestone payment of $22.5 million, is subject to the effectiveness of an investigational new drug application for EBI-031, according to a statement issued by Eleven Biotherapeutics. The payment is time-related. If the IND becomes effective before Sept. 15, the company will receive the $22 million, but Eleven will lose $2 million if the IND becomes effective after Sept. 15, the company said. Eleven Biotherapeutics submitted the IND to the U.S. Food and Drug Administration on June 13.

EBI-031 is a humanized monoclonal antibody that binds Interleukin-6 (IL-6) and inhibits all known forms of IL-6 cytokine signaling. EBI-031 was designed for intravitreal delivery using Eleven Biotherapeutics’ AMP-Rx platform. The drug blocks both free IL-6 and IL-6 complexed to the soluble IL-6 receptor.

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