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Diving brief:

  • A Dallas-based gene therapy developer with a long list of research projects has decided to prioritize two moving forward and in doing so will cut its workforce by about 35%, joining a series of others space companies that have turned to layoffs in recent months.
  • Taysha Gene Therapies officially debuted almost two years ago as a spin-out from the University of Texas-Southwestern. Led by RA Session II, who led AveXis’ corporate strategy and business development prior to its $8.7 billion sale to Novartis, Taysha quickly gained investor interest and went public just five months after its launch. The company had 178 employees at the end of 2021.
  • When it launched, Taysha had ambitious plans to advance at least 15 projects and bring a new product to market every few years. Now, she plans to focus her research efforts on giant axonal neuropathy and Rett syndrome, rare diseases that Taysha says affect 5,000 and 350,000 people worldwide, respectively. The company said it still intends to continue developing three more programs for different rare diseases.

Overview of the dive:

Gene therapy holds great promise, with the potential to effectively cure a range of diseases. Already, the Food and Drug Administration has approved two such drugs, Luxturna from Roche and Zolgensma from Novartis, the latter of which was developed at AveXis. Yet, as with most cutting-edge technologies, there have been challenges, among them the fact that gene therapies can be expensive to develop and difficult to manufacture.

For start-ups like Taysha, these challenges have been mitigated by easy access to money. In recent years, the biotechnology sector has been inundated with record capital from venture companies and the public markets. Taysha, notably, priced the stock at the high end of the company’s estimated range when it went public in September 2020, raising $157 million in the process.

But investor sentiment toward biotech companies, which soared to new heights at the start of the coronavirus pandemic, has deteriorated significantly in recent months. While the city center has affected drugmakers in all areas of research, it has been difficult for those developing gene therapies. In addition to Taysha, at least ten other gene therapy developers have announced layoffs, cost cuts or restructured programs since December.

Taysha’s current priorities are to advance a program targeting Rett syndrome, which is in preclinical testing, and another focused on giant axonal neuropathy, which is currently undergoing a preliminary study that should yield more results. late this year. The company also noted that it expects to achieve major milestones this year in programs for two types of Batten disease and a rare form of childhood epilepsy.

But elsewhere, Taysha cut back. A small trial testing one of its therapies for Tay-Sachs disease will halt recruitment, for example, although patients who were previously dosed will continue to be followed.

“To increase operational efficiency, activities of other ongoing clinical programs will be minimized and all further research and development will be halted,” Session said in a statement Thursday.

Taysha announced the layoffs and strategic changes alongside the fourth quarter and full year results. The company spent $132 million on research and development last year and ultimately posted an operating loss of $173 million. Session said that with existing cash, debt financing and the newly implemented strategy, Taysha should have enough cash to operate through the fourth quarter of 2023.

Shares of Taysha rose around 3% on Friday morning, before dropping to nearly $6.50 apiece.