Lava cuts jobs by 30% after key drug discontinued

LAVA Therapeutics Restructures After Drug Discontinuation

LAVA Therapeutics announced a 30% workforce reduction5 8
The company discontinued development of LAVA-1207 for metastatic castration-resistant prostate cancer3 6
Restructuring aims to extend cash runway into 20271 6
LAVA is shifting focus to LAVA-1266 for acute myeloid leukemia and myelodysplastic syndrome1 6

Background

LAVA Therapeutics, a clinical-stage biotech company, has announced a significant restructuring plan following the discontinuation of its key drug candidate LAVA-1207. The drug, a bispecific gamma-delta T-cell engager, was being evaluated for prostate-specific membrane antigen (PSMA)–positive metastatic castration-resistant prostate cancer (mCRPC)1 3.

Reasons for Discontinuation

The decision to halt LAVA-1207's development came after the phase 1 portion of a clinical trial failed to meet the company's "predetermined success criteria"1 3. While some clinical signals were observed, including PSA reductions in several patients and extended time on study for those with higher baseline circulating Vd2 T cells, these were not sufficient to warrant continued development6.

Restructuring Details

As part of its restructuring efforts, LAVA Therapeutics plans to:

Reduce its workforce by approximately 30% by July 31, 20255 8
Implement cost-containment and cash conservation measures5
Reprioritize its pipeline to focus on LAVA-1266 for acute myeloid leukemia and myelodysplastic syndrome1 6
Continue supporting partnered programs with Pfizer and Johnson & Johnson6 8

Financial Impact

The company expects to incur approximately $0.5 million in one-time costs related to the workforce reduction, primarily in Q1 20255. Despite these costs, LAVA reports having about $79 million in cash, which it believes will fund operations into 2027 following the restructuring1 6.

Future Outlook

LAVA Therapeutics is now exploring strategic alternatives to maximize shareholder value, including potential in-licensing, sales, or mergers8. The company will continue its clinical study of LAVA-1266 while maintaining its partnerships with major pharmaceutical companies8.

Sources:

1. https://www.fiercebiotech.com/biotech/lava-burnt-failure-clinical-stage-cancer-drug-phase-1-pivots-preclinical-backup

3. https://www.onclive.com/view/development-of-lava-1207-discontinues-in-mcrpc

5. https://www.thelayoff.com/t/1jmza1913

6. https://ir.lavatherapeutics.com/news-releases/news-release-details/lava-reports-third-quarter-2024-financial-results-and-announces

8. https://www.tipranks.com/news/company-announcements/lava-therapeutics-announces-restructuring-plan-for-2025