The writing is on the wall at Mural Oncology. Responding to clinical data, the biotech is laying off 90% of its employees and stopping clinical development of its lead program to hunker down and seek a strategic alternative.
Mural reported the failure of nemvaleukin alfa, an IL-2 variant, to get past an interim phase 3 analysis in March. At the time, the biotech stopped development of the asset in platinum-resistant ovarian cancer, where it was being tested in combination with Merck & Co.’s Keytruda, but kept working toward phase 2 data in mucosal melanoma.
Tuesday, Mural reported the failure of one cohort of the potentially registrational melanoma trial. The biotech also looked at preliminary data from another cohort but “did not observe a level of activity that warranted continuation.” Coupled with the phase 3 flop, the results persuaded Mural to axe nemvaleukin.
The decision triggered wholesale organizational changes. Mural is laying off 104 people, or around 90% of its workforce. The company expects the layoffs to cost up to $10 million and to incur $2 million to $4 million in non-cash impairment charges associated with the sale or disposal of property and equipment.
The charges point to the scale of Mural’s retreat. The biotech has engaged a financial advisor to help it review strategic alternatives. Nemvaleukin was Mural’s only clinical-phase program, but the biotech also has two preclinical prospects, a Nasdaq listing and, as of the end of December, $144.4 million in cash to offer potential buyers.
Mural’s abandonment of nemvaleukin ends the biotech’s short run at bucking the trend in IL-2. Alkermes created Mural to advance its IL-2 program in November 2023. The biotech started life with $275 million to show nemvaleukin is different from other IL-2s, a class of cytokines that unraveled in the aftermath of Bristol Myers Squibb’s costly misadventure with Nektar Therapeutics.
The biotech’s belief that nemvaleukin could succeed, despite the failures of similar drugs, was built on its use of features to limit activation of immune-suppressive regulatory T cells. Mural made the case that its fusion protein could retain the efficacy that made Proleukin a pioneering immunotherapy while limiting toxicity. Other groups used approaches such as pegylation and prodrugs to try to achieve that goal.
None of the approaches have delivered a safe, effective IL-2 drug to date. The addition of nemvaleukin to the list of failed attempts triggered a more than 100% jump in Mural’s share price in premarket trading. The company was valued at less than $18 million before the surge, despite Mural having much more than that in cash. Investors seemingly see more money in a strategic alternative than IL-2 development.