GlobeImmune said today its board has authorized eliminating most of its workforce positions as part of its evaluation of strategic options following the failure last month of its lead infectious disease product, a hepatitis B vaccine candidate that the company has been co-developing with Gilead Sciences.

The company had 22 employees as of December 31, 2014—a figure confirmed to GEN today by a GlobeImmune spokesman.

In its announcement, GlobeImmune added that it does not have a timeframe for its strategic review. The company added that it was not confirming its review will result in any specific action or transaction.

The announcement comes some two weeks after GlobeImmune disclosed the failure of GS-4774 in the “0101” Phase II trial.

“Following our recent data announcement in our hepatitis B program, this workforce reduction is a necessary action to conserve working capital and provide maximum flexibility in determining the future direction of GlobeImmune,” the company’s president and CEO Timothy C. Rodell, M.D., said today in a statement.

“These steps are not expected to have an impact on ongoing clinical trials being conducted by its collaborators in oncology and hepatitis B,” the company added.

GlobeImmune said on May 27 that in chronic hepatitis B patients on long term viral suppression with an oral antiviral (OAV) treatment, the highest dose of GS-4774 plus ongoing OAV missed its primary endpoint by failing to show a reduction in hepatitis B surface antigen (HBsAg) at week 24. GS-4774 also showed a positive, but not statistically significant, reduction in hep B after 48 weeks, and was shown to be safe and well tolerated in the study, the company added.

There was no difference in HBsAg reductions between the two lowest dose groups versus the control arm at 48 weeks. However, GS-4774 showed HBsAg reductions in three patients receiving the highest dose, which Dr. Rodell said at the time “suggests initial biologic activity at the highest dose tested.”

The 0101 trial enrolled 178 patients and compared three different doses of GS-4774 in combination with oral antiviral therapy versus antiviral treatment alone. The multicenter, multinational trial employed a randomized, open-label design.

“We look forward to collaborating with our partner Gilead Sciences, Inc. to identify potential next steps for GS-4774 in this patient population as well as to seeing the results from the second ongoing Phase II trial of GS-4774 in HBV treatment-naïve patients,” Dr. Rodell added.

Investors, however, were apparently more pessimistic, since news of the trial failure sent GlobeImmune’s share price plunging 51% that day, from $8.24 to $4.01. Shares closed at $3.83 yesterday, and fell another 30% to $2.69 in after-hours trading as of 9:26 am.

In 2011, GlobeImmune licensed to Gilead development and commercialization rights to new hepatitis B vaccine products for use with Gilead’s Viread® (tenofovir disoproxil fumarate) and other oral therapies. While the value of the agreement was not disclosed, the companies said Gilead agreed to pay GlobeImmune an upfront payment and support GlobeImmune's continued development of its HBV therapeutic vaccine program through Phase Ia clinical trials.

As part of the deal, Gilead agreed to take full responsibility for clinical development following Phase Ia, and to pay GlobeImmune additional payments tied to achieving development milestones, as well as royalties on future potential net sales.

Gilead has not disclosed whether it will continue to co-develop GS-4774 with GlobeImmune. The company has received no news from Gilead, the spokesman told GEN.

In addition to its Gilead collaboration, GlobeImmune partners with Celgene in development of two oncology drugs. The two are GI-6301, indicated for chordoma (Phase II) and advanced cancers (Phase I), for which Celgene holds worldwide licensing rights; and GI-6207 for medullary thyroid cancer (Phase II), for which Celgene holds an option.

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