Rubius replaces CEO as it cuts more jobs and considers a sale

Dive Brief:

  • Four years after going public with a valuation of about $2 billion, Rubius Therapeutics has laid off almost all its employees and is considering a sale.
  • CEO Pablo Cagnoni will step down Nov. 15, along with the biotech’s chief financial officer and top lawyer. The current chief operating officer, Dannielle Appelhans, will become CEO and president and take on interim roles overseeing finance and accounting, according to a company filing Wednesday with the Securities and Exchange Commission.
  • The steps come less than two months after Rubius announced plans to cut 75% of his staff of more than 200 and stop development of its two most advanced drug prospects. Rubius said Wednesday it has now terminated another 42 employees, or 82% of its remaining workforce, suggesting the company’s payroll now consists of nine staff.

DiveInsight:

The past four years have been a roller coaster for investors in Rubius, which burst onto the biotech scene with the intriguing goal of turning engineered red blood cells into medicines. Founded by Flagship Pioneering in 2014, the company launched a large initial public offering in mid-2018, and Cagnoni became one of the most well-compensated CEOs in the biotech industry.

In late July 2018, Rubius shares briefly traded as high as $27 apiece, but then began a slow decline as the company encountered delays in producing study data and later switched its research focus. By March 2020, the stock dipped below $4.

Rubius shares soared again in March 2021 when the company announced early clinical data in cancer patients that it claimed offered a proof of concept for its technology. Executives took advantage of the bump to offer another round of shares at $29 a piece. But that turned out to be the high point. Shares were worth about 30 cents in early trading Thursday, giving the company a market value of less than $30 million.

The remaining executives at the company are tasked with exploring “a range of strategic alternatives to maximize shareholder value,” Rubius said. Possibilities include a sale of all or part of the company. Both Appelhans and Chief Scientific Officer Laurence Turka will be entitled to payments that may total $400,000 to pursue strategic alternatives for the company, as well as bonuses for meeting certain goals.

Cagnoni will stay on the board and has assumed the position of chairman, replacing Flagship founder and CEO Noubar Afeyan. When he formally steps down as CEO on Nov. 15, Cagnoni will become an executive partner at Flagship.

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