Kiromic BioPharma has put 31 people on furlough. The cell therapy biotech has stopped paying the employees, which make up “substantially all” of its workforce, until it raises money to ease its cash crisis.
Texas-based Kiromic is developing off-the-shelf gamma delta T-cell therapies. The biotech went public in 2020 but has never had deep pockets, with the IPO grossing $15 million. By the end of last year, Kiromic was down to its last $1.14 million. The cash crunch led the biotech to warn investors that it may have to delay or reduce the scope of its research programs or cease operations.
The situation reached a head last week. After the markets closed Monday, Kiromic revealed it had furloughed 31 employees on March 11 as part of its “greater cost-reduction efforts.” The employees aren’t allowed to work on Kiromic projects and won’t receive salary or wages, although Kiromic will still provide certain benefits.
In theory, furloughing the employees, rather than laying them off, could enable Kiromic to quickly get its research programs back up to speed if it raises cash. That is the plan, with the biotech proposing to keep the employees on furlough until it secures additional financing.
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However, Kiromic said its inability to pay staff may result in workers terminating their relationship with the company or pursuing legal remedies. The biotech warned “a material loss of its employee base” may leave it unable to continue its Deltacel clinical trial and develop its product candidates.
Deltacel is a non-engineered gamma delta T-cell therapy. Kiromic is testing the candidate in combination with low-dose targeted radiation in patients with advanced non-small cell lung cancer. Last month, the biotech said 10 patients had received Deltacel and two people had experienced partial responses. A third subject had a 100% response in their metastatic brain lesions.
The biotech has sketched out plans to file to run a pivotal phase 2 trial by the end of 2025 and submit an application for approval in 2027. Kiromic switched its focus to Deltacel in 2022, one year after raising $40 million to fund development of two other candidates. The Securities and Exchange Commission recently charged Kiromic for failing to disclose clinical holds on the candidates before the $40 million financing.