MW IGM Biosciences to cut 73% of workforce as latest pivot fails to pan out

By Ciara Linnane

Stock is already down 54% in the last three months after the company switched to autoimmunity from oncology late last year

IGM Biosciences Inc. said Thursday it is cutting 73% of its workforce after deciding to halt further development of a program relating to its autoimmunity-drug pipeline.

The company (IGMS) had 198 full-time employees as of the end of September, according to its most recent 10-Q regulatory filing, meaning that about 144 workers will be affected.

Interim data from early stage trials of the company's imvotamab as a treatment for rheumatoid arthritis and systemic lupus erythematosus "show that the depth and consistency of B cell depletion is insufficient to meet our high bar for success," Mary Beth Harler, chief executive of IGM Biosciences, said in a statement.

The Mountain View, Calif.-based company is also scrapping its IGM-2644 treatment for autoimmune diseases as part of the move.

The stock market was closed Thursday for the funeral of former U.S. President Jimmy Carter, but the stock is down 54% in the last three months, after taking a dive in October when the company announced a pivot away from oncology to focus on autoimmune diseases.

That news led Truist and J.P. Morgan analysts to downgrade the stock, with the latter reducing it to underweight - the equivalent of sell. Truist downgraded it to hold from buy.

For more, read: IGM Biosciences' stock tumbles as analysts weigh in on pivot plan with dismay

"While we think the opportunity is considerably larger than itsabandoned oncology efforts, data for T cell engages (TCEs) in autoimmune diseases is still very nascent, and physicians we have spoken to so far mostly have low expectations for the addressable patient population (5% in rheumatoid arthritis)," Truist analysts Asthika Goonewardene and Karina Rabayeva wrote in a note to clients at the time.

J.P. Morgan's Eric Joseph agreed and noted that the early stage rheumatoid arthritis trial had a "poorly defined" bar for a differentiated clinical profile.

Harler came in as CEO as part of the October strategy change after more than a decade at Bristol Myers Squibb Co. $(BMY)$, where she headed up immunology and fibrosis development.

The company is now evaluating internal options and possible strategic tie-ups with the goal of maximizing shareholder value, she said.

The company had about $183.8 million in cash and investments as of Dec. 31, Harler said.

Imvotamab is a T cell engaging antibody that targets CD20 and CD3 proteins. IGM Biosciences was evaluating it in three trials, the third being a treatment for myositis, a rare autoimmune disease that affects the muscles and causes chronic inflammation.

Analysts have been mostly bullish on the stock, however. Of the eight analysts offering coverage on FactSet, six rate it a buy, two have it at hold and one rates it a sell.

The stock is down 47% in the last 12 months, while the SPDR S&P Biotech exchange-traded fund XBI is down 1.4% and the S&P 500 SPX has gained 24%.

-Ciara Linnane

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January 09, 2025 14:28 ET (19:28 GMT)

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