FREQ - Frequency crashes ~75% on abandoning hearing loss programs as trial fails; cuts ~55% jobs

Frequency Therapeutics ( NASDAQ: FREQ ) is reducing its workforce by 55% and abandoning programs in Sensorineural Hearing Loss (SNHL) after FX-322 failed to meet the mail goal of a phase 2b study in people with acquired SNHL.

Phase 2b trial :

The company said the trial, which enrolled 142 people with either sudden or noise-induced SNHL, failed to achieve its main efficacy goal of an improvement in speech perception.

Data showed no statistically meaningful difference at day 90 between those receiving FX-322 versus those receiving placebo in the proportion of individuals that showed an improvement in speech perception.

Frequency added that there were also no measurable improvements in any of the study's secondary goals. The safety profile of FX-322 was favorable and no study participants experienced a serious adverse event that was associated with treatment.

Discontinuation of Programs :

The company noted that it will now discontinue the FX-322 development program.

In addition, FX-345, a second program to treat SNHL, will also be discontinued. Dosing of FX-345 has been completed in a safety group of an ongoing phase 1b trial.

New focus area :

Frequency said it will now focus on advancing its program in Remyelination for multiple sclerosis (MS).

Frequency noted that it has identified multiple novel chemical entities that induce remyelination following demyelination in an adult in vivo animal model. The company plans to start a clinical program for remyelination in H1 2024.

Restructuring :

In addition, Frequency said it will immediately reduce headcount as part of an overall restructuring, downsizing workforce by ~55%.

The company believes that the restructuring will lead to sufficient cost savings to extend its runway into 2025 and enable it to complete the first trial of its MS program in H2 2024.

As of Dec. 31, 2022, Frequency had cash, cash equivalents and marketable securities of $83.1M (excluding restricted cash).

CEO on medical leave :

The company said CEO David Lucchino is on temporary medical leave after being hospitalized with bacterial meningitis. The board CSO Chris Loose a interim CEO until Lucchino returns.

Lucchino is expected to make a full recovery and return to his role in the coming weeks, according to the company.

FREQ -78.38% to $0.85 premarket Feb. 13

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