Arsenal Biosciences, a cell therapy startup based in South San Francisco, has laid off approximately 100 employees—representing about half of its workforce—just one year after completing a $325 million Series C funding round. The cuts come as the company transitions from early-stage cancer research to clinical trials, according to a company spokesperson.
The layoffs were disclosed through a WARN filing on Tuesday, indicating that affected employees either reported to the company's Oyster Point headquarters or worked remotely. Most of the terminated workers will officially leave their positions on November 14, 2024.
Workforce Restructuring Targets Research Roles
The reduction primarily impacts scientist and researcher positions, though several director-level executives and two vice presidents are also among those losing their jobs, according to the WARN notice. The affected workers are not unionized.
"To do this, we have had to make the difficult decision to reduce our workforce by about 50%," Arsenal spokesperson Amanda Breeding stated. "This reorganization will enable us to execute on our clinical programs and advance them through critical milestones."
Clinical Pipeline and Strategic Focus
Arsenal is currently conducting a study for its leading candidate, a cell therapy focused on kidney cancer. The company also maintains two other proprietary prospects and operates two collaboration programs with pharmaceutical giant Bristol Myers Squibb.
The company, launched in 2019, had previously raised $220 million in its Series B funding round in 2022 before securing the $325 million Series C in September 2023. Arsenal likely received additional capital three months after the Series C when Bristol Myers Squibb licensed an experimental cell therapy developed under their longstanding collaboration.
Industry Context and Investor Backing
Arsenal's funding success positioned it as a rare bright spot in the cell therapy sector, which has faced significant investor skepticism. The company attracted investment from prominent firms including venture firm Kleiner Perkins, Nvidia's venture capital arm, and SoftBank Vision Fund 2.
The cell therapy field initially gained momentum after CAR-T therapies demonstrated powerful results in blood cancers and won regulatory approval. This success led venture firms to fund numerous startups promising to develop new cell therapies that were either less onerous to manufacture, more effective at treating blood cancers, or capable of targeting solid tumors like lung or breast cancer.
However, cell therapy companies have struggled over the past couple of years amid an industry-wide pullback in biotech funding that has led to austerity measures, job cuts, and shutdowns across the Bay Area.
Employee Impact
Several Arsenal employees had already posted about their layoffs on LinkedIn by Monday. One research staff member wrote: "This came as a shock to all of us as we had just raised an unprecedented 325M Series C this time last year. Unfortunately, biotech is anything but predictable."
The restructuring aims to extend Arsenal's cash runway as it focuses resources on advancing its clinical programs through critical development milestones with a significantly reduced team.
