On September 12, 2024, Oncternal Therapeutics, Inc., a pharmaceutical company, disclosed a significant reduction in its workforce and the discontinuation of certain clinical trials. The San Diego-based company, which specializes in pharmaceutical preparations, announced the termination of approximately 37% of its employees, amounting to around 10 individuals.
This decision aims to decrease operating expenses while retaining essential capabilities as Oncternal evaluates business development opportunities for its clinical programs.
The board of directors unanimously approved the workforce reduction on September 11, 2024. Oncternal estimates that it will incur charges around $1.0 million, primarily due to severance and related costs, with the majority of charges expected to be recognized in the third quarter of 2024.
In conjunction with the reduction, Chief Medical Officer Dr. Salim Yazji will depart effective October 1, 2024. Dr. Yazji is entitled to severance and health benefits in accordance with his employment agreement.
Furthermore, Oncternal announced the cessation of its clinical trials for ONCT-534, a treatment for metastatic castration-resistant cancer, and ONCT-808, a CAR T therapy for aggressive B-cell lymphoma. Interim Phase 1 results for ONCT-534 did not demonstrate significant improvements, and although ONCT-808 showed some anti-tumor activity, the company has opted to terminate these studies due to the clinical data and the capital required for further development.
The company is now exploring strategic alternatives to maximize shareholder value, which may include asset sales, licensing, mergers, or other business combinations. During this process, Oncternal will halt all product development activities and implement further cost reductions.
Oncternal's forward-looking statements caution that there is no guarantee of successful strategic transactions or continued operations, even if a transaction is completed. The company faces risks, including the potential inability to conserve cash or retain key personnel, and the possibility of delisting from the Nasdaq.
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