By Kamal Choudhury (Reuters) -ITeos Therapeutics plans to wind down its operations and sell its assets, including experimental cancer treatments and an obesity drug, the company said on Wednesday, two weeks after its lead drug failed in two studies. The drug developer and its partner, GSK, said earlier this month they have stopped developing belrestotug […]
Health
Drug developer iTeos winds down after cancer therapy setback
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By Kamal Choudhury
(Reuters) -ITeos Therapeutics plans to wind down its operations and sell its assets, including experimental cancer treatments and an obesity drug, the company said on Wednesday, two weeks after its lead drug failed in two studies.
The drug developer and its partner, GSK, said earlier this month they have stopped developing belrestotug after the experimental lung cancer drug failed to stop the disease from progressing in two studies.
ITeos said its decision to wind down, made after a review of alternatives, will help “maximize shareholder value.”
The company had a market cap of $326.48 million as of Tuesday’s close, compared with its cash balance of $624.3 million as of March 31.
Its shares were up 20% at $10.23 following the announcement.
The decision to wind down was the best path for iTeos’ shareholders, Wedbush analyst David Nierengarten said in a note titled, ‘Vercingetorix cedes the good fight,’ referring to the Gallic leader who lost to Julius Caesar after a long revolt.
The company expects to incur about $21.8 million to $24.7 million in severance and employee termination costs, along with an additional $11.1 million to shut down its clinical development programs, according to a regulatory filing.
It will also face additional expenses for contract and lease terminations as well as costs related to concluding its collaboration with GSK.
ITeos said it was unable to provide estimates for these expenses at this time.
The company plans to substantially complete the wind-down process by the third quarter of 2025, with clinical program closures extending beyond that time frame.
Operations at its Belgian facilities are subject to a consultation process that will partially determine final costs, the company said.
ITeos has also amended employment agreements to enhance severance benefits for its top three executives to help retain them during the review, according to a regulatory filing dated May 27.
(Reporting by Kamal Choudhury in Bengaluru; Editing by Shreya Biswas)