Heat Biologics said today it will eliminate 22% of its workforce—six jobs—and cut the pay of its leadership team, in cost-cutting moves designed to enable the company to complete two clinical trials now in progress.
Heat identified two executives among the departing staffers: Timothy Creech, CFO and corporate secretary, and Anil Goyal, vp of Business Development. Both will receive severance payments of $142,500 and $85,000, respectively, and both left the company effective April 4, Heat stated in a regulatory filing.
The following day, Heat named Ann Rosar vp of finance and corporate secretary. She had been the company’s controller since January 2015.
Three other Heat executives, led by CEO Jeffrey Wolf, agreed to defer a percentage of their annual base salary each month from April through December. Wolf will defer 25% of his base pay, compared with 20% each for Melissa Price, vp of product development, and CSO Taylor Schreiber.
The cost-cutting measures are designed to help the company achieve, with current cash on hand, data readout in the fourth quarter for two clinical programs. One is the Phase II lead program for HS-410 (vesigenurtacel-L) for nonmuscle invasive bladder cancer, designed to assess the candidate alone or in combination with standard-of-care Bacillus Calmette-Guerin (BCG) therapy. Heat said it will complete that trial.
Also to be completed is the Phase Ib program for HS-110 (viagenpumatucel-L) for non-small-cell lung cancer (NSCLC), in which Heat will advance the current eight patients enrolled in the Phase Ib trial assessing the combination of HS-110 with Bristol-Myers Squibb’s PD-1 checkpoint inhibitor nivolumab for NSCLC. Heat originally planned to enroll 18 patients.
The candidates were developed using Heat’s Immune Pan-Antigen Cytotoxic Therapy (ImPACT) cancer immunotherapy platform.
Heat's cost-cutting comes less than a month after the company raised less than expected in a public offering designed to fund both trials. The company raised $6.8 million in gross proceeds from the offering of 9.1 million shares of common stock and warrants to purchase up to an aggregate 6.825 million shares. Earlier this year Heat said it hoped to raise $12.5 million from the offering.
In addition, Heat said two members of its Board of Directors have resigned, Louis C. Bock and Michael Kharitonov, Ph.D. Bock, who joined the board in 2013, served on the Audit Committee, while Dr. Kharitonov, a director since 2009, served on the Compensation Committee and Nominating and Corporate Governance Committee.
“The resignations from the Board were not due to any disagreement related to the Company’s operations, policies or practices,” Heat stated in the regulatory filing.
According to the filing, Heat estimated it will incur total expenses relating to termination benefits of approximately $295,000 in the second quarter, as well as another $299,000 in the first quarter of 2017 tied to retention bonuses equal to 3 months of base salary for Dr. Price, Dr. Schreiber, and Rosar, as well as retention bonuses to four other employees that will be paid if they stay with the company through December 31, 2016.