Seattle-based Kineta Inc. (Nasdaq: KA) is laying off its CEO Shawn Iadonato and general counsel Pauline Kenny in a round of cutbacks that will leave the biotech with just four employees.
Iadonato and Kenny are two of the seven employees who will be laid off, representing about 64% of Kineta's workforce. The decision, according to the company, was partly due to investors pulling back on a second tranche of funding later this year.
“We are deeply disappointed that certain investors in the April financing will not fulfill their funding obligations," Iadonato said in a release.
Kineta had less than 30 employees as of June 2022. The company has four employees now.
Kineta is focused on immunotherapies in cancer treatment. KVA12123 is meant to help cancer patients mount a more effective immune response.
The company also said it is no longer enrolling new patients in clinical trials for its lead drug, KVA12123, as a treatment for advanced solid tumors. It is looking into alternatives, including "sale of assets of the company, a sale of the company, licensing of assets, a merger, liquidation or other strategic action."
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Iadonato co-founded the company in 2008, serving as chief scientific officer before taking over the CEO role in 2016. He will remain on the company's board, and both he and Kenny will be consultants for the company through the end of the year.
Craig Philips now leads the company as president.
The company went public in December 2022 through a reverse merger with Boston-based biotech Yumanity Therapeutics Inc., which was focused on neurodegenerative diseases.
At the time of the reverse merger, which was first announced in June 2022, Kineta closed a $7.5 million private investment in public equity (PIPE) financing round and said it had runway through the middle of this year.
In April of last year, Kineta raised $6 million through a registered direct offering, or when a company engages a firm to sell a certain number of shares on a best-effort basis. Registered direct offerings usually target institutional investors, but retail investors can also participate.
"I think what's happened to Yumanity, you're seeing that with a lot of companies, especially with a single-asset company that has difficulty with that asset in the clinic. It's very hard for them to pivot anywhere," Iadonato said when the deal was announced. "We hope that Kineta's pipeline has enough diversity in it that if one of our assets is not successful, then we have enough opportunity remaining in the pipeline."
In June of last year, Kineta received notice that it had fallen out of compliance with Nasdaq listing rules. Kineta regained compliance in August.
Kenny has been with Kineta since 2012, according to her LinkedIn page, before which she was an attorney at Beacon Law Advisors.
