BioXcel Therapeutics Inc (NASDAQ:BTAI) stock opened close to 45% lower as trading kicked off in New York on Monday after it revealed it would be wielding the axe across its business.
Around half of BioXcel’s workforce is to be laid off whilst it cuts operations and focusses solely on its most advanced treatment line.
The Connecticut-headquartered company, in a statement, said it will now prioritize the development of its drug BXCL501 – described as an ‘at home’ treatment for agitation in patients with schizophrenia, bipolar and dementia.
It comes after previous reports in June relating to safety data from a trial involving Alzheimer's patients.
The drug is already sold, under the brand Igalmi, for use in hospital settings for patients with schizophrenia or bipolar disorder.
Whilst cutting its workforce in half, BioXcel also said would focus on AI-powered strategies.
“We are shifting our primary focus to development in the at-home setting while maintaining our value-creating core capabilities ranging from AI innovation to commercialization,” chief executive Vimal Mehta said in a statement.
“Our AI-driven drug re-innovation approach has led to the capital-efficient development of product candidates in underserved therapeutic areas."
Mehta added: “Unfortunately, this reprioritization requires us to reduce our workforce.
“We are grateful to all employees for their contributions and will support those who are impacted through their transitions.”
BioXcel is shuttering trials it deems non-core and cutting back commercial spend focussing for in-hospital segment. It reckons the cutbacks will reduce cash-burn by 50%, to US$80 million per year, and told investors it had US$127.5 million at the end of June.
The development of BXCL501 is supported by strategic financing, announced in April 2022, with Oaktree Capital and the Qatar sovereign wealth fund.
BioXcel said it expects existing cash resources to last until mid-2024 if it does not draw additional funds from Oaktree and/or Qatar.
In New York, BioXcel stock was down US$3.36 or 45.4%, changing hands at US$4.01 per share.