Dewpoint Therapeutics lays off 15% of its staff

Dewpoint Therapeutics, the buzziest startup trying to tackle a new field of biology called biomolecular condensates, laid off 15 percent of its staff on Tuesday and acknowledged that a pair of collaboration deals with pharma companies had fallen apart.

The downsizing is temporary, CEO Ameet Nathwani told STAT. The company needed to hire new employees with expertise to help move the company’s first drugs into clinical trials and expand its AI capabilities. And with funding for early-stage biotechs still sparse, leadership opted to cut some positions and use the savings to fill new ones over the coming months. Roughly 20 positions were cut.

“We talked to investors right now [about raising more money], and they think that the environment for a preclinical company — it’s not even worth having that discussion,” Nathwani said.

He acknowledged, however, that the company had faced setbacks. Both Pfizer and Merck dropped out of partnerships they signed with Dewpoint to use its technology — to develop an HIV cure, in Merck’s case, and to treat a form of muscular dystrophy, in Pfizer’s case. Dewpoint had not previously disclosed the end of either collaboration.

Neither Merck nor Pfizer immediately responded to requests for comment.

The company needed to hire new employees with expertise to help move the company’s first drugs into clinical trials and expand its AI capabilities.

The startup, originally launched by the VC firm Polaris, is trying to exploit a new view of how cells function. Cells are microscopic arenas, crammed with billions and billions of proteins, nucleic acids, and other miscellaneous molecules. How do they keep all the pieces organized and in the right place? Part of the answer is the organelles that high school students learn about.

But part of the answer, researchers at the Max Planck Institutes proposed in 2009, involves condensates. Cells form droplets, like specks of oil in water, that can either bring molecules together to enable biochemical reactions or sequester them apart to prevent them. Though overlooked for a century, research now suggests they could be involved in all manner of cellular processes.

Along with $287 million in VC funds over three rounds, Dewpoint signed a slew of partnerships with large pharma companies. The startup promised to go after cardiovascular disease, viruses, women’s health, diabetes, neurological conditions, and cancer, touting in early 2022 that it had over 20 programs.

After an initial surge of activity, however, the condensate field has gone quiet. Faze Medicines, a rival company launched in late 2020, shut down less than two years later. Other condensate biotechs founded around the same time have said little since. The CEO of Transition Bio, a rival that raised a $50 million Series A in 2022, quietly parted ways with the company last year.

Still, Nathwani said Dewpoint had made progress on key programs and plans to push its first two drugs into clinical trials next year. Those include a molecule against betacatenin, a protein long known to drive cancer but that has been difficult to target because it lacks a clear binding spot for chemists to lodge a drug.

The company’s other lead program is in ALS, he said, where drug developers have notoriously struggled with other approaches. It will also continue work with Bayer on a genetic form of dilated cardiomyopathy, a devastating type of heart failure where other drug discovery efforts have failed.

Nathwani said the company will have enough money to start those trials but may need to raise more to generate proof-of-concept data.