Cybin Inc. (NEO: CYBN) (NYSE American: CYBN) slashed 15% of its workforce as part of a “streamlining plan” as the biopharmaceutical company realigns to increase focus on clinical trials and reduce its cash burn rate.
The affected staff were identified by the company as holding roles that “were not of a clinical priority or were not directly involved with any of the company’s clinical trial initiatives,” the company said in a statement.
“The company has made the prudent decision to evaluate every role within its workforce, including whether certain tasks could be performed more efficiently while ensuring that the company’s core clinical activities continue to be robustly supported and resourced,” CEO Doug Drysdale said.
In its earnings report announced last week, Cybin noted that the net loss for its fiscal third quarter that ended Dec. 31, 2022, improved 38% over the prior year, highlighting success in previous cost-cutting efforts. But apparently those moves were not enough.
Cybin had C$22.5 million worth of cash at the end of the third quarter and C$20 million as of the Feb. 14 filing. Net loss totaled C$10.7 million versus to a net loss of C$17.2 million in the same period last year.
The anticipated cost savings from this streamlining exercise are expected to reduce the company’s annual cash burn rate by millions of dollars. Combined with the previously announced US$35 million at-the-market equity program, the company expects to have near-term and long-term funding for its core clinical initiatives, including its ongoing trials of CYB003, which is being evaluated to treat major depressive disorder, and CYB00, targeting generalized anxiety disorder.
Cybin is not alone. Several companies engaged in research around psychedelics have been struggling to maintain financing while not having a market-ready product yet, including Field Trip Health & Wellness Ltd. (TSXV: FTHW) (OTCQB: FTHWF), which just announced an independent committee to explore strategic options for the company, and Mind Cure, which starting winding down operations late last year.