Biotech company Nkarta announced a significant restructuring on Wednesday that will reduce its workforce by approximately one-third and see the departure of several senior executives, as the company aims to extend its financial runway while advancing its autoimmune cell therapy programs.
The restructuring, revealed during the company’s fourth quarter earnings report, will eliminate 53 positions and implement a hiring freeze. Among the departures is Chief Strategy and Business Officer Alyssa Levin, who will leave her position effective March 31. The company’s current president, Nadir Mahmood, has been appointed to assume her responsibilities as principal financial and accounting officer.
CEO Paul Hastings emphasized that the restructuring decision affects all organizational levels and is focused on maintaining clinical development momentum in a challenging market environment. The company aims to preserve resources to continue developing cellular therapies for autoimmune conditions.
As of December 31, Nkarta reported having 157 full-time employees and cash reserves of nearly $381 million. The company recorded a net loss of approximately $109 million for 2024. With the implemented changes, Nkarta expects to extend its operational timeline into 2029.
The company’s journey began with more than $100 million in private funding before its 2020 public offering. Initially, Nkarta focused on developing donor-derived “natural killer” cell therapies as an alternative to personalized cancer treatments like Yescarta and Kymriah. However, the company struggled to demonstrate that its lead therapy could match the durability of existing personalized
treatments.
Facing declining share prices and a difficult fundraising environment, Nkarta shifted its focus last year to autoimmune conditions. This strategic pivot was influenced by academic research suggesting that their therapies could help reset immune system function in patients with conditions such as lupus.
Nkarta has joined a competitive field of more than a dozen companies working to translate this research into viable treatments, either through cell therapies or antibody drugs. The company maintains that its approach offers unique advantages, combining the effectiveness of personalized cell therapies with the convenience of an off-the-shelf solution.
According to Chief Medical Officer David Shook, personalized cell therapies are impractical for treating autoimmune conditions. He also noted uncertainties about the effectiveness of T cell engagers, a type of antibody drug being investigated for autoimmune diseases, citing safety concerns that have limited their use in oncology.
Earlier this year, Hastings addressed the company’s strategic shift, noting the changing landscape of drug development. “I believe that our drug is developable in oncology, because usually in Phase 1, you’re discovering and you’re testing different regimens,” he said in January. “You don’t have the luxury of doing that anymore. If it’s the first time your data comes out, that’s it.”
The company’s immediate future hinges on upcoming clinical trial results. Nkarta expects to release initial data later this year from two studies evaluating its therapy, NKX019, in multiple autoimmune conditions. These results will be crucial in validating the company’s strategic pivot and its approach to treating autoimmune diseases.
The restructuring reflects broader challenges faced by biotech companies in the current market environment, where demonstrating clear clinical benefits and maintaining financial sustainability have become increasingly critical for survival and success.