San Diego biotech Artiva Biotherapeutics is laying off about 94% of its workforce and abandoning its lead immunotherapy treatment for rheumatoid arthritis roughly five months after raising about $300 million from investors.

The company said Tuesday that updated data showed its lead candidate, AlloNK — an off-the-shelf natural killer cell therapy — was initially effective in clinical trials, but the benefits did not last long enough to justify a planned Phase 3 trial. The biotech also faced scrutiny after two patients in the clinical trials died, though neither death appeared to be related to the AlloNK therapy trial.

In June, Artiva had 115 full-time employees and plans to grow, according to federal filings. Now the company is cutting almost all of its staff, many of whom work at the company’s headquarters in San Diego. An official WARN notice detailing the layoffs has not yet been filed.

Artiva was founded in 2019. Since the beggining, the biotech has been experimenting with therapies that harness the body’s natural defense systems to fight autoimmune conditions like rheumatoid arthritis by using donor killer cells. AlloNK was viewed as having the most potential among other experimental immunotherapies.

Though AlloNK had promising early clinical results, “longer-term data showed that durability of clinical response did not meet the threshold the Company required to support continued development,” the company said in a statement Tuesday.

The San Diego biotech decided to abandon its lead candidate before the final trial, predicting that further research wasn’t worth the risk of failure.

Artiva was also facing scrutiny regarding the patient deaths.

“Throughout the development of AlloNK, the safety and well-being of patients have remained our highest priority. We are deeply saddened by the deaths of two patients who participated in our clinical studies and extend our sincere condolences to their families,” said Dr. Fred Aslan, chief executive officer of Artiva.

An investigator and an independent safety review board assessed both deaths.

In one case, a Phase 2a trial participant suffered a fatal neurological event, leukoencephalopathy, following the study, according to a news release from Artiva. The investigator determined the death was likely related to fludarabine, a mild chemotherapy regimen typically administered to patients in immunotherapy trials.

A second participant died suddenly approximately two months after initiating treatment. The investigator ruled the event unrelated to AlloNK or any other component of the study regimen; the exact cause of death remains undetermined.

Following the discontinuation of its lead candidate, company executives are evaluating what to do next. The company mentioned options to sell, merge or even liquidate.

“We don’t have a specific timeline that we can share at this point. AlloNK was the only program we were developing, and now that we are no longer continuing development, we are exploring alternatives that maximize shareholder value,” said Noopur Batsha Liffick, head of investor relations at Artiva.

Artiva held approximately $319.1 million in cash and investments as of Sept. 30, according to the public company’s federal filings.

Staffing and clinical development represented Artiva’s largest expenses. Of the roughly $25 million spent last year, $11.8 million supported drug development and $10.8 million went toward personnel.

However, Artiva still faces substantial “wind-down” costs related to severance, trial terminations, site obligations, lease commitments on its San Diego facility, and partner agreements, Aslan acknowledged.

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