WATERTOWN, Mass. - Lyra Therapeutics, Inc. (NASDAQ: LYRA), a clinical-stage biotechnology firm, announced today that it has taken significant cost-reduction steps, including laying off approximately 75% of its workforce. The decision, impacting 87 employees, comes as part of the company's strategy to preserve capital and extend its cash runway into 2026.
The company will now concentrate on its ongoing ENLIGHTEN Phase 3 trials for LYR-210, an investigational sinonasal implant for chronic rhinosinusitis (CRS), after the ENLIGHTEN 1 trial did not meet its 24-week primary endpoint.
According to the press release, the company will use the data from this trial to guide the completion of the ENLIGHTEN 1 trial's 52-week extension phase, with results expected in the fourth quarter of 2024, and to inform its approach to the ongoing ENLIGHTEN 2 trial.
As part of the restructuring, Lyra Therapeutics has halted manufacturing and commercialization efforts for its products and is seeking to sublease its facilities to further reduce operating costs. The company has also paused efforts for another product candidate, LYR-220.
Maria Palasis, Ph.D., President and CEO of Lyra Therapeutics, expressed gratitude to the affected employees for their dedication and contributions to the company while acknowledging the difficulty of the decision.
The company also announced plans to evaluate potential strategic options to maximize shareholder value, although there is no certainty that this process will result in any transaction or that any transaction, if pursued, will be completed on favorable terms.
Prior to the workforce reduction, Lyra Therapeutics reported having approximately $87.1 million in cash, cash equivalents, and short-term investments as of March 31, 2024. The company will provide an update when it reports its second quarter 2024 financial results.
This announcement is based on a press release statement from Lyra Therapeutics. The company's focus remains on the treatment of CRS, a condition affecting millions annually and leading to significant morbidity. Lyra Therapeutics has not set a timetable for the completion of its strategic review and does not intend to publicly update or revise any information regarding the status.
InvestingPro Insights
Following the recent announcement by Lyra Therapeutics (NASDAQ: LYRA) regarding its workforce reduction and strategic refocusing, the company's financial health and market performance come under scrutiny. According to InvestingPro data, Lyra Therapeutics holds a market capitalization of $22.74 million, with a notably negative P/E ratio of -0.31, reflecting the challenges the company faces in achieving profitability.
The company's revenue growth has been positive, with a 28.74% increase over the last twelve months as of Q1 2024. Still, this is overshadowed by a significant gross profit margin of -2783.81%, indicating substantial costs in relation to revenue. Moreover, the stock has experienced a steep decline, trading near its 52-week low and showing a 1-month price total return of -92.81%.
InvestingPro Tips for Lyra Therapeutics suggest that while the company holds more cash than debt on its balance sheet, it is quickly burning through cash. This is a crucial consideration for investors, given the company's need to extend its cash runway into 2026. Moreover, the stock's RSI indicates it is in oversold territory, which could attract investors looking for potential undervalued opportunities.
For investors seeking a more comprehensive analysis, InvestingPro offers additional insights and tips. There are currently 16 more InvestingPro Tips available for Lyra Therapeutics, which can be accessed through the platform's dedicated page for the company. Investors interested in these insights can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Given the company's focus on its ENLIGHTEN Phase 3 trials and the pause in manufacturing and commercialization efforts, these insights from InvestingPro could prove valuable for shareholders and potential investors as they navigate the company's future in a highly volatile market.
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