Caladrius Biosciences will lay off approximately 40 employees in Irvine, CA, in a restructuring that will include ending development of its Phase III lead candidate, CLBS20, for metastatic melanoma.

Caladrius—which changed its name from NeoStem in June—said yesterday it will refocus its clinical development efforts on CLBS03, a Phase II T regulatory cell therapy candidate for type 1 diabetes.

CLBS had been the subject of a Phase III study as a monotherapy for recurrent Stage III or Stage IV metastatic melanoma. Caladrius said its decision reflected accelerating adoption over the past year of multiple immune checkpoint inhibitors both as monotherapy and in combination treatments.

“These new drugs have significantly improved outcomes in metastatic melanoma and therefore have altered the opportunity for a monotherapy such as CLBS20 in a landscape that is quickly converting to combination therapies,” Caladrius CEO David J. Mazzo, Ph.D., said in a statement. “Therefore, we have concluded that, as designed, our current program in metastatic melanoma will not optimally leverage this asset.”

Dr. Mazzo added that Caladrius will pursue licensing or partnership opportunities for continued development of CLBS20 as part of a combination therapy and in different oncology indications: “The emphasis will be on collaborating with a company that will allow us to exploit the novel antigen presentation and T cell activation approach of CLBS20.”

CLBS03 is based on the company’s immune modulation approach that seeks to restore immune balance by enhancing T regulatory cell number and function.

Caladrius said it plans to begin enrollment in a Phase II study for adolescents with recent-onset type 1 diabetes in the first quarter of this year, in collaboration with the non-profit research organization Sanford Research.

Caladrius also said it will shift greater focus and resources to its growing cell therapy process development, optimization, and manufacturing services business at its PCT subsidiary—whose revenues the company expects will grow by more than 30% this year.

“We strongly believe PCT represents a compelling opportunity for near- and long-term shareholder value creation, and we intend to continue to invest resources in expanding that business, where we are already experiencing noteworthy year-over-year revenue growth,” Dr. Mazzo added.

In third-quarter 2015 results released November 5, Caladrius reported a 43% increase over Q3 2014 in total revenues to $5.9 million—a jump the company said was driven by increases in clinical service revenue at PCT.

Caladrius estimated it will incur restructuring charges of about $1 million in connection with one-time employee termination costs, including severance and other benefits, in Q1.

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