GlycoMimetics Announces Strategic Review and Corporate Restructuring Plan

Rhea-AI Summary

GlycoMimetics (Nasdaq: GLYC) has announced a strategic review and corporate restructuring plan following FDA feedback on uproleselan for relapsed/refractory Acute Myeloid Leukemia (AML). Key points include:

1. An additional clinical trial is required for uproleselan in R/R AML.
2. The company will explore strategic alternatives to maximize shareholder value.
3. Discussions continue with NCI and Alliance for Clinical Trials in Oncology for the ongoing Phase 2/3 study of uproleselan in newly diagnosed AML.
4. Workforce reduction of approximately 80%.
5. Cash runway extended into Q2 2025.

GlycoMimetics aims to find partners to advance uproleselan and GMI-1687, believing both have potential to address unmet needs in their respective areas. The company had $31.3 million in cash as of March 31, 2024.

Positive

• Extended cash runway into Q2 2025
• Ongoing Phase 2/3 study of uproleselan in newly diagnosed AML patients
• Potential for business development opportunities for uproleselan and GMI-1687

Negative

• FDA requires additional clinical trial for uproleselan in R/R AML
• Workforce reduction of approximately 80%
• Initiation of strategic review, indicating potential challenges

Biotechnology Analyst

The announcement from GlycoMimetics reveals significant challenges and strategic shifts that will likely impact the company's future. The key points that warrant attention are:

• The FDA's requirement for an additional clinical trial for uproleselan in R/R AML is a major setback, potentially delaying the drug's path to market and increasing costs.
• The initiation of a strategic review, including potential business development opportunities for uproleselan and GMI-1687, suggests the company is exploring options to salvage value from these assets.
• The drastic workforce reduction of approximately 80% indicates a severe cost-cutting measure to extend the cash runway.

These developments paint a picture of a company in crisis, forced to reevaluate its core strategy. The continuation of the NCI-sponsored Phase 2/3 study in newly diagnosed AML patients offers a glimmer of hope, but it's clear that GlycoMimetics is pivoting away from its previous trajectory.

For investors, this news signals increased risk and uncertainty. The extended cash runway into Q2 2025 provides some breathing room, but the company's future hinges on the outcome of its strategic review and potential partnerships or acquisitions. The market is likely to react negatively to this news, given the setbacks in the company's lead program and the significant restructuring.

In the broader context of biotech investing, this situation underscores the inherent risks in drug development, particularly in oncology. It also highlights the importance of pipeline diversity and strong cash positions in weathering regulatory challenges.

Financial Analyst

From a financial perspective, GlycoMimetics' announcement carries several critical implications:

• The company's cash position of $31.3 million as of March 31, 2024, while providing some runway, is relatively modest for a biotech company facing significant clinical and strategic challenges.
• The 80% workforce reduction will result in substantial near-term restructuring costs, but should significantly lower the company's burn rate moving forward.
• The extension of the cash runway into Q2 2025 gives GlycoMimetics approximately 12-15 months to execute its strategic review and potentially secure a partnership or acquisition.

Investors should be aware that this situation often leads to dilutive financing or potentially unfavorable deal terms if the company needs to partner its assets from a position of weakness. The engagement of Lucid Capital Markets as a strategic advisor suggests that all options, including a potential sale of the company, are on the table.

The market cap of GlycoMimetics is likely to contract significantly following this news, as the company's near-term prospects have dimmed considerably. However, speculative investors might see opportunity in the potential for a buyout or lucrative partnership deal, especially if the ongoing NCI study yields positive results.

From a valuation standpoint, the company will likely be valued primarily on its cash position and the potential value of its intellectual property and pipeline assets. Given the setbacks, any premium to cash value will depend heavily on the perceived value of uproleselan and GMI-1687 to potential partners or acquirers.

Oncology Research Specialist

The developments at GlycoMimetics highlight several important aspects of oncology drug development, particularly in Acute Myeloid Leukemia (AML):

• The FDA's requirement for an additional clinical trial for uproleselan in relapsed and refractory AML underscores the high regulatory bar for approval in this indication. This reflects the complex nature of AML and the need for robust efficacy data.
• The continuation of the NCI-sponsored Phase 2/3 study in newly diagnosed AML patients is a positive signal. This study, evaluating uproleselan in combination with standard chemotherapy, could provide valuable data on the drug's potential in a frontline setting.
• The focus on both relapsed/refractory and newly diagnosed AML demonstrates the unmet medical need across the disease spectrum.

Uproleselan's mechanism of action, targeting E-selectin, represents an innovative approach in AML treatment. If successful, it could offer a new option for improving the efficacy of standard chemotherapy regimens.

The strategic review and potential partnering of uproleselan and GMI-1687 could actually benefit their development. A larger pharmaceutical company with more resources might be better positioned to navigate the regulatory challenges and conduct the necessary additional trials.

For the broader oncology field, this case highlights the importance of adaptive trial designs and close collaboration with regulatory bodies throughout the development process. It also underscores the value of government-sponsored trials in supplementing company-led studies, potentially providing additional data to support regulatory submissions.

• After meeting with the U.S. Food and Drug Administration (FDA), it has been determined that the regulatory path forward for uproleselan in relapsed and refractory (R/R) Acute Myeloid Leukemia (AML) would require an additional clinical trial
• The Company will conduct a strategic review of the business seeking to maximize shareholder value, including the evaluation of potential business development opportunities for uproleselan and GMI-1687 to ensure their continued advancement
• The Company is advancing discussions with the National Cancer Institute (NCI) and Alliance for Clinical Trials in Oncology for the ongoing Phase 2/3 study of uproleselan in newly diagnosed AML patients
• The Company will reduce its workforce by approximately 80%; cash and cash equivalents are expected to fund the company into the second quarter of 2025

ROCKVILLE, Md.--(BUSINESS WIRE)-- GlycoMimetics, Inc. (Nasdaq: GLYC), a late clinical-stage biotechnology company discovering and developing glycobiology-based therapies for cancers and inflammatory diseases, today announced the initiation of a strategic review and corporate restructuring plan. GlycoMimetics has engaged Lucid Capital Markets to act as a strategic advisor in the process.

“We are committed to acting in the best interests of patients, employees and shareholders. Given our organization’s cash resources, we plan to explore a range of potential strategic alternatives and seek to deliver value to our shareholders and find avenues that allow uproleselan and GMI-1687 to build upon their clinical promise, including in the ongoing NCI Phase 2/3 study of uproleselan in newly diagnosed AML patients,” said Harout Semerjian, Chief Executive Officer of GlycoMimetics. “We believe both drug candidates have the potential to address significant unmet needs in their respective therapeutic areas and we are focused on finding organizations to advance these programs. We are proud of our team’s dedication to improving the lives of patients and are thankful for their hard work progressing uproleselan and GMI-1687.”

The Company will evaluate strategic alternatives and no timetable has been set for the conclusion of the strategic review or the consummation of any such strategic transaction.

GlycoMimetics had cash and cash equivalents of approximately $31.3 million as of March 31, 2024. Based on the corporate restructuring and streamlining of operations, the Company expects to significantly reduce future operating expenses and extend its cash runway into the second quarter of 2025.

NCI Phase 2/3 Study of Uproleselan in Frontline AML

The National Cancer Institute (NCI) and the Alliance for Clinical Trials in Oncology are conducting an adaptive Phase 2/3 study of uproleselan in adults with newly diagnosed AML who are 60 years or older and fit for intensive chemotherapy. Their randomized, controlled study is evaluating the addition of uproleselan to a standard cytarabine / daunorubicin regimen (7+3) versus chemotherapy alone. The Phase 2 portion of the study completed enrollment of 267 patients in December 2021.

About AML

AML is the most common acute leukemia in adults. A cancer of the bone marrow, nearly 21,000 people in the United States are diagnosed with AML each year. Despite the availability of multiple treatments, disease prognosis is poor, and new treatment options are needed to improve outcomes. Newly diagnosed AML has the lowest 5-year survival rate of all leukemias at 31.7%. The five-year survival rate for people with relapsed/refractory disease is only 10%.

About Uproleselan

Discovered and developed by GlycoMimetics, uproleselan (yoo’ pro le’se lan) is an investigational, first-in-class E-selectin antagonist. GlycoMimetics has received Breakthrough Therapy and Fast Track designations from the U.S. Food and Drug Administration (FDA) and Breakthrough Therapy designation from the Chinese National Medical Products Administration for uproleselan as a potential treatment for adult AML patients with relapsed or refractory disease. E-selectin is a leukocyte adhesion molecule constitutively expressed on endothelial cells of the vasculature and bone marrow. In AML, there is evidence that E-selectin–ligand interaction between endothelial cells in the protective niche of the Bone Marrow microEnvironment (BME) and leukemic stem cells and blasts promotes leukemic cell survival and hides them from AML therapies. Uproleselan is designed to disrupt E-selectin binding and prevent leukemic myeloid cells using the protective niche of the BME.

About GMI-1687

Discovered and developed by GlycoMimetics, GMI-1687 is a highly potent E-selectin antagonist that is bioavailable after subcutaneous administration. This second-generation compound has potential application in oncology and inflammatory diseases, and the company’s initial clinical development has focused on sickle-cell disease (SCD). E-selectin is believed to play a major role in vaso-occlusive events (VOEs), a group of acute complications that are associated with SCD and include vaso-occlusive pain crises, acute chest syndrome (ACS), stroke, and splenic sequestration. Administration of GMI-1687 by subcutaneous injection, if successfully developed in the clinic, may enable this study drug to be approved as a patient-controlled, point-of-care treatment option.

About GlycoMimetics, Inc.

GlycoMimetics is a late clinical-stage biotechnology company discovering and developing glycobiology-based therapies for cancers, including AML, and for inflammatory diseases. The company’s scientific approach is based on an understanding of the role that carbohydrates play in cell recognition. Its specialized chemistry platform can be used to discover small molecule drugs, known as glycomimetics, that alter carbohydrate-mediated recognition in diverse disease states, including cancers and inflammation. The company’s goal is to develop transformative therapies for diseases with high unmet medical need. GlycoMimetics is headquartered in Rockville, MD in the BioHealth Capital Region. Learn more at www.glycomimetics.com.

Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding the conduct of a strategic review of its business, the implementation of a corporate restructuring plan, the extension of its cash resources, and the potential benefits and impact of its product candidates. Actual results may differ materially from those described in these forward-looking statements. For a further description of the risks associated with these statements, as well as other risks facing GlycoMimetics, please see the risk factors described in the company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on March 27, 2024, the company’s Quarterly Report on Form 10-Q filed with the SEC on May 9, 2024, and other filings GlycoMimetics makes with the SEC from time to time. Forward-looking statements speak only as of the date of this release, and GlycoMimetics undertakes no obligation to update or revise these statements, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725473857/en/

Investor Contact:

Argot Partners

Leo Vartorella

212-600-1902

Glycomimetics@argotpartners.com

Source: GlycoMimetics, Inc.

FAQ

What is the current status of GlycoMimetics' (GLYC) uproleselan development for AML?

The FDA has determined that an additional clinical trial is required for uproleselan in relapsed/refractory AML. However, discussions continue with NCI and Alliance for Clinical Trials in Oncology for the ongoing Phase 2/3 study of uproleselan in newly diagnosed AML patients.

How is GlycoMimetics (GLYC) restructuring its operations?

GlycoMimetics is implementing a corporate restructuring plan that includes a workforce reduction of approximately 80% and a strategic review to explore potential business development opportunities for uproleselan and GMI-1687.

What is GlycoMimetics' (GLYC) financial outlook following the restructuring?

GlycoMimetics had approximately $31.3 million in cash and cash equivalents as of March 31, 2024. The company expects to extend its cash runway into the second quarter of 2025 due to the corporate restructuring and streamlining of operations.

What is the status of the NCI Phase 2/3 study of uproleselan in frontline AML for GlycoMimetics (GLYC)?

The NCI and Alliance for Clinical Trials in Oncology are conducting an adaptive Phase 2/3 study of uproleselan in adults with newly diagnosed AML who are 60 years or older. The Phase 2 portion completed enrollment of 267 patients in December 2021.