Equities

Amylyx Pharmaceuticals Slashes Workforce, Withdraws ALS Drug Amid 82% Share Plunge

NEGATIVE

Amylyx to cut 70% of workforce, withdraw ALS drug Relyvrio after failing Phase 3 trial, shares down 82% this year.

By Jack Wilson

4/4, 07:58 EDT
article-main-img

Key Takeaway

  • Amylyx Pharmaceuticals (AMLX) is slashing 70% of its workforce, incurring $19 million in severance charges.
  • The company is withdrawing its ALS drug Relyvrio from the market after failing a critical Phase 3 trial.
  • Amid these challenges, AMLX shares have fallen 82% this year, reflecting deep investor concerns over its future.

Job Cuts and Market Withdrawal

Amylyx Pharmaceuticals (AMLX), a company once buoyed by the promise of its neurological disorder treatments, has recently announced a drastic reduction in its workforce, signaling deeper troubles within. The biotechnology firm disclosed plans to eliminate approximately 70% of its jobs, a move expected to result in around $19 million in severance charges. This decision underscores the financial strain and operational challenges Amylyx faces, particularly in the wake of its latest clinical setback.

Relyvrio's Market Exit

In a significant blow to its product lineup, Amylyx revealed the removal of Relyvrio from the market. Relyvrio, aimed at slowing the progression of ALS (Lou Gehrig’s disease), failed to meet its objectives in a critical Phase 3 trial. The company had harbored hopes for Relyvrio to make a significant difference in the lives of those suffering from this debilitating neurological disorder. However, the trial results showed "no significant difference" between the patients who received Relyvrio and those who were given a placebo, leading to a reevaluation of the drug's market viability.

Financial Turbulence

The repercussions of these developments have been starkly reflected in Amylyx's stock performance. Despite a modest uptick of 1.9% in premarket trading following the announcement, the company's shares have plummeted 82% this year. This dramatic decline not only highlights investor skepticism but also casts a long shadow over the company's financial health and future prospects.