A South San Francisco biotech company betting its future on a novel cancer treatment will shed nearly one-third of its workforce. ALX Oncology confirmed Wednesday that the layoffs, affecting roughly 30 percent of staff, aim to buy the struggling firm more time.
The cuts arrive as the volatile biotech sector faces a prolonged shakeout. Once flush with pandemic-era investment, many smaller drug developers now confront painful restructurings or outright closures. ALX itself rode a wave of enthusiasm following its 2020 founding, eventually hitting a valuation near $3 billion during 2021 peaks.
Now the picture looks starkly different. The company’s stock has cratered, leaving its total market value at approximately $54 million as of Wednesday afternoon.
CEO Jason Lettmann described the reductions as a difficult choice. Based on a headcount of 89 employees reported in September 2024, the layoffs will eliminate a couple dozen positions concentrated primarily in preclinical research.
That shrinking footprint frees up capital for what ALX views as its best shot at survival. The firm plans to channel resources into breast and colorectal cancer trials centered on evorpacept, its lead therapeutic candidate. The drug works by blocking deceptive “don’t eat me” signals that cancer cells broadcast, helping the body’s natural defenses and other treatments destroy tumors.
Ultimately, the move delivers a critical financial lifeline. ALX now projects its available cash will keep operations running into the final quarter of 2026. That runway stems from roughly $185 million in assets recorded last September, even as the company’s accumulated deficit since launch has climbed to around $591 million.
Despite dwindling resources and a collapsing share price, leadership struck a defiant tone. Wednesday’s release framed evorpacept as a potential cornerstone therapy capable of shaping the future of immuno-oncology.
The company did not immediately answer requests for comment on the restructuring. Meanwhile, the broader sector continues absorbing similar blows, with both established giants and fledgling startups tightening their belts in a challenging funding environment.
