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ALX Oncology Holdings Inc. (NASDAQ:ALXO), a biopharmaceutical company with a market capitalization of $54.33 million, has disclosed plans to reduce its workforce by approximately 30% as part of a strategic reorganization aimed at prioritizing its product pipeline and preserving cash. The reduction, which affects the company’s research and preclinical development employees, is expected to be largely completed by the end of May 2025. According to InvestingPro analysis, the company has been quickly burning through cash, making this restructuring particularly crucial for its financial sustainability.
The South San Francisco-based company anticipates incurring around $2.2 million in severance and related benefits costs, which are projected to be recognized in the first quarter of 2025. While these estimates are based on certain assumptions and actual costs may vary, InvestingPro data shows the company maintains a strong current ratio of 4.82, indicating sufficient liquid assets to meet its short-term obligations.
In conjunction with the workforce reduction, ALX Oncology also announced the departure of its President and Chief Scientific Officer, Dr. Jaume Pons, whose position will be eliminated in April 2025. Dr. Pons is set to receive severance payments equivalent to his annual salary and up to 12 months of COBRA health coverage. The company plans to enter into a consulting agreement with Dr. Pons to ensure a smooth transition, allowing him to provide consulting services on an hourly basis for up to a year post-separation.
This news comes as part of a current report filed with the Securities and Exchange Commission on March 5, 2025, which includes forward-looking statements about ALX Oncology’s business strategies and the expected financial impact of the workforce reduction. The company has cautioned that these statements involve risks and uncertainties, and actual results may differ from those anticipated.
ALX Oncology’s actions reflect the ongoing adjustments within the pharmaceutical industry as companies align their resources with strategic objectives. The company’s filings with the SEC provide additional details on its operational and financial strategies.
In other recent news, ALX Oncology Holdings Inc. reported positive outcomes from its ASPEN-06 Phase 2 clinical trial, showcasing a significant tumor response in patients with HER2-positive advanced gastric cancer. The trial results, presented at the 2025 ASCO Gastrointestinal Cancers Symposium, revealed an overall response rate (ORR) of 41.3% in the intent-to-treat population, with a particularly notable ORR of 48.9% among patients with confirmed HER2-positive cancer. Analysts from UBS revised their price target for ALX Oncology to $2.20, down from $4.00, while maintaining a Buy rating, citing the need for further investigation of evorpacept in larger studies. Stifel analysts maintained a Hold rating with a $3.00 price target, noting the potential benefits of evorpacept as a combination drug in HER2+ gastric cancer. Cantor Fitzgerald reaffirmed its Overweight rating, highlighting the promising data from the ASPEN-6 study and its implications for cancer treatment. H.C. Wainwright also adjusted its price target for ALX Oncology to $5 from $25, maintaining a Buy rating amid evolving market dynamics. The U.S. Food and Drug Administration has granted Fast Track designation for evorpacept, emphasizing the urgent need for new therapeutic options in this area. These developments underscore the ongoing interest and analysis from various investment firms regarding ALX Oncology’s potential in the oncology sector.
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