Kezar Faces Significant Staff Loss, CEO Persists in Advancing Lead Lupus Candidate to Phase 2 Milestone

Kezar Faces Significant Staff Loss, CEO Persists in Advancing Lead Lupus Candidate to Phase 2 Milestone

Kezar Life Sciences is embarking on a significant restructuring plan aimed at preserving cash resources over the next two years until critical phase 2 data for its lead lupus drug becomes available. The strategic overhaul entails a reduction of 41% of the company’s workforce, including the departure of Chief Medical Officer Noreen Henig, M.D., and CEO John Fowler, with their exits scheduled for October 6 and November 7, respectively.

In this transformative phase, Christopher Kirk, Ph.D., one of Kezar’s co-founders and former president and chief scientific officer until April of this year, will assume the role of CEO. Zung To, the Senior Vice President of Clinical Development Operations, will take charge of clinical trials and drug development operations.

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The restructuring extends to Kezar’s pipeline, where all research and development activities have been indefinitely suspended. The company is actively seeking licensing partners for its protein secretion platform and preclinical programs. Nevertheless, work on KZR-261, the first candidate derived from the platform, will persist. Initial phase 1 data for solid tumors are anticipated next year, while top-line data from a phase 2a trial in autoimmune hepatitis is expected in mid-2025. Even for the tumor trial, the company intends “to reduce the number of planned expansion cohorts to conserve cash resources while it continues to evaluate safety and biologic activity.”

The primary objective of this restructuring is to secure adequate cash reserves to ensure the successful completion of Kezar’s lead asset, zetomipzomib, a selective immunoproteasome inhibitor. The pivotal phase 2b PALIZADE trial for lupus nephritis is the key milestone on the horizon. As of June, the company had $236.6 million in cash and equivalents.

Also Read: August Layoffs: A Recap Of Recent Workforce Reductions In Biotech And Pharma

“These difficult but necessary decisions to streamline our operations and align resources around our clinical programs should put us on a path to long-term success, extending our runway past key data points, particularly the readout for our PALIZADE trial.”

– CEO Fowler

Incoming CEO Kirk expressed excitement about leading Kezar through this crucial phase, focusing on the zetomipzomib and KZR-261 clinical programs.

Kezar has positioned zetomipzomib as a groundbreaking drug candidate that can target multiple cells and cytokines with a single molecule by inhibiting the immunoproteasome. While traditional treatments often target specific cells or cytokines, zetomipzomib offers a more comprehensive approach. The drug faced challenges in May 2022 when it failed to outperform a placebo in a midphase trial for two rare autoimmune diseases, causing a drop in the company’s stock price. However, optimism was restored when the drug successfully met its target in a phase 2 study for lupus nephritis the following month.

Kezar’s zetomipzomib has attracted interest beyond the company itself, with Everest Medicines securing Asian rights to the drug for the same indication in a deal valued at $132.5 million.

Analysts from William Blair described the restructuring as a “prudent decision” in light of investor concerns about the company’s ability to complete the PALIZADE trial. They maintained a positive outlook on zetomipzomib’s profile and its potential in treating lupus nephritis.

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