VLST Cuts Jobs To Preserve Cash, Still Feeding Novo Nordisk Pipeline
VLST, the Seattle-based biotech company seeking new ways of treating autoimmune diseases, has recently completed a round of layoffs.
I received a tip that the company eliminated about 30 percent of its workforce in recent weeks.
CEO Marty Simonetti confirmed that job cuts have occurred, but wouldn’t say how many people were let go or which departments were affected. The company had about 40 employees the last time I counted for this April feature story about VLST and its partner, Danish drug giant Novo Nordisk.
“On an as-needed basis, we evaluate our programs and resources to make sure they are in alignment. Upon recently completing such an evaluation, we restructured to best fit our current needs,” Simonetti said in an e-mail. “Our restructuring was not focused on any group in particular. Our research group is heavily focused on our relationship with Novo Nordisk which has not changed.”
The cuts were a bit surprising to me, given how VLST solidified its financial footing a year ago when it signed the deal with Novo. That deal brought in $12 million upfront to VLST, and Novo agreed to pay the salaries for 12 of the smaller company’s 40 employees over the next three years. The partnership meant that VLST had at least enough cash to run through the end of 2010, Simonetti said when the deal was closed. VLST had previously raised a $55 million financing commitment in 2006, and had collected $35 million of that over the subsequent two years, Simonetti has said. The company’s investment syndicate includes Texas Pacific Group Ventures, MPM Capital, Arch Venture Partners, OVP Venture Partners, Amgen Ventures, MedImmune Ventures, and WRF Capital.
VLST was one of the first companies that got started at the Seattle-based Accelerator in 2004. The company has no drug candidates in clinical trials, but is built on a new way of discovering drugs for autoimmune diseases. Its scientists look for proteins that viruses naturally secrete in the body to help fend off an immune system reaction that might kill them. The concept is to study these immune-dampening proteins, and the targets they hit on cells, to develop new drugs for autoimmune diseases.