Viracta Shuts Down Operations: A Closer Look at Its Financial Struggles

Viracta Therapeutics recently announced it will cease operations and lay off its remaining employees. This decision came from the company’s Board of Directors and took effect on Wednesday at 5 p.m. PST. As part of the shutdown, Viracta expects to incur a one-time cost of about $100,000, mainly associated with staff wages and severance.

Before the announcement, several top executives, including CEO Mark Rothera and Chief Medical Officer Darrel Cohen, resigned. The Board has appointed Craig Jalbert from Verdolino & Lowey, P.C., as the new CEO and president to manage the company’s closure. He will receive a salary of $50,000 per year for three years.

Viracta has faced significant challenges recently. Last August, it initiated a plan that involved cutting 23% of its workforce in an effort to realign its resources. Initially, the company shifted focus from treating Epstein-Barr virus-positive solid tumors to concentrating on EBV+ lymphomas.

In November, Viracta laid off an additional 42% of its staff to further redirect resources. By December, the company announced it would halt its lymphoma program entirely, aiming to extend its cash runway. Despite these challenges, Viracta maintained that the decision was not due to safety issues.

In January, Viracta was delisted from Nasdaq for not meeting the minimum share price requirement. Prior to this, the company had high hopes for a treatment known as nana-val, which combines an experimental drug, nanatinostat, with valganciclovir. Phase II trial results showed promising potential, with a 33% overall response rate in patients with EBV+ peripheral T-cell lymphoma.

Interestingly, Viracta’s closure follows a similar move by Valerio Therapeutics. Valerio recently shut down its U.S. operations and will focus on early-stage research, particularly involving single-chain antibodies, as it seeks new opportunities.

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