By Hannah Green
After a trial of Lyra Therapeutics Inc.’s drug to treat sinus inflammation failed to meet the goals of a late-stage trial earlier this month, the company is cutting its workforce and looking to sublease its facilities as it hunts for “strategic options.”
Lyra (Nasdaq: LYRA) shared in a Tuesday securities filing that it’s laying off 75% of its workforce, or 87 employees. The cuts include John Bishop, the company’s chief technology officer, while CEO Maria Palasis and CFO Jason Cavalier will stay on.
The company has also stopped manufacturing and commercialization efforts. Lyra is now looking to sublease its sites to reduce operating costs.
In February, the Business Journal reported that Lyra was moving to a new 52,000-square-foot space at 880 Winter St. in Waltham. The company said around 60% of the new facility is manufacturing, product quality control and lab space. Lyra was based at a 22,000-square-foot headquarters at 480 Arsenal Way in Watertown.
A company spokesperson said on Tuesday that Lyra continues to have office and laboratory space in both Watertown and Waltham.
“As we streamline our operations to focus on our ongoing clinical trials, we are taking aggressive measures to extend our cash runway,” CEO Maria Palasis said in a statement. “Unfortunately, these measures impact our employees, who helped to build Lyra. I would like to convey my gratitude to our employees for their dedication to helping patients and for their contributions to the company.”
In the meantime, Lyra said it “plans to evaluate potential strategic options to maximize shareholder value.”
Phase 3 results disappoint
The cost-cutting efforts come after Lyra shared earlier this month that its Phase 3 ENLIGHTEN 1 trial evaluating LYR-210 for the treatment of chronic rhinosinusitis did not meet its 24-week primary endpoint.
Chronic rhinosinusitis is an inflammatory disease that affects the paranasal sinuses and causes congestion, facial pain and pressure, and even loss of smell. The company’s lead product, LYR-210, is an expandable drug delivery mesh that can be applied to the site of disease through the nose. It expands and consistently delivers anti-inflammatory medication over six months.
LYR-210 is being evaluated in two Phase 3 studies. On Tuesday the company said it intends to complete the 52-week extension phase of the ENLIGHTEN 1 trial and the ongoing ENLIGHTEN 2 trial.
Lyra is tabling work on LYR-220, a larger version of LYR-210 to be used by patients who have had sinus surgery.
Lyra had $87.1 million in cash, cash equivalents and short-term investments as of March 31, 2024. The company said it expects its recent steps to extend Lyra’s cash runway into 2026.
Lyra’s shares were trading at $5.25 on May 1 ahead of the data readout, but have dropped more than 90% over the past month and are now 37 cents apiece.