ETX-123

Eliem Therapeutics will "conduct a comprehensive exploration of strategic alternatives focused on maximizing shareholder value." Five months after waving goodbye to its phase-2-ready depression drug candidate and laying off 55% of staff, Eliem Therapeutics is closing its sole remaining program and assessing its “strategic alternatives.” Back in February, the biotech cited the “challenging capital environment” as the reason for ending work to get its most advanced candidate, ETX-155, into a phase 2 trial for major depressive disorder. Combined with reducing its head count by more than half, the hope was that the company would be able to extend a cash runway into 2027. The pared-back Eliem would instead focus on its Kv7 program, including lead preclinical candidate ETX-123 that was being developed as a potential treatment for epilepsy. But despite the company’s previous sacrifices, Eliem announced this morning that after completing a review of the business, it has “made the determination to halt further development of its Kv7 program and to conduct a comprehensive exploration of strategic alternatives focused on maximizing shareholder value.” While it feels like a last resort for the business, the bank account is far from empty. In fact, the biotech ended June with around $102.6 million in cash, equivalents and investments in marketable securities. Still, Eliem has presumably decided that this isn’t enough to take the preclinical Kv7 program all the way to market. The focus on Kv7.2/3 always came with some risk. GSK and Valeant won approval for a Kv7.2/3 opener, branded Potiga, as an adjunctive treatment of partial-onset seizures in 2011 but pulled it from the market six years later after side effects stymied sales. Eliem first put itself on the map in 2021 when it unveiled with $80 million, the backing of RA Capital Management and a pipeline featuring some intriguing clinical-phase pain and depression prospects. It was enough to persuade investors to provide a further $60 million two months later, to be followed by a $92 million IPO before the year’s end.   However, the public listing was followed by some less welcome news, with the company forced to drop its lead pain program in August 2022 after failing a phase 2a clinical trial. Even before then, Eliem’s share price had been on a steady decline and now sits below $3 compared with a September 2021 high of over $28 per share.

Washington-based biotech Eliem Therapeutics says it is for strategic alternatives, including an acquisition, merger, business combination or another transaction. Eliem is now working with Leerink Partners to look for a potential transaction to maximize shareholder value. The biotech also announced that it would be pausing the development of its lead Kv7 program, a validated target for pain and epilepsy. Kv7 channels are strongly regulated by various physiological and pharmacological signals. According to Eliem, previous first-generation Kv7.2/3 channel openers demonstrated potent efficacy but were withdrawn from the market due to significant safety issues. Eliem, which has locations in the U.S. and R&D operations in Cambridge, UK, reported a preliminary unaudited cash amount of approximately $102.6 million including cash, cash equivalents, and investments in marketable securities as of June 30, 2023. The news follows Eliem's this year to layoff 55% of its workers, in an attempt to extend its cash runway into 2027. At the time, the biotech said it would focus on itsnow-paused Kv7.2/3 programand the development of its candidate ETX-123. The job cuts included itsCEO,Bob Azelby along with the company's CFO and general counsel.