Item 2.05 Costs Associated with Exit or Disposal Activities
On February 16, 2023, the Board of Directors (the "Board") of Aileron
Therapeutics, Inc (the "Company") determined to reduce the Company's remaining
workforce from nine to three employees. The determination to effect the
workforce reduction was made in connection with the Company's decision, further
described below, to terminate its Phase 1b breast cancer trial of ALRN-6924 and
further development of ALRN-6924. The workforce reduction is designed to reduce
the Company's operating expenses while the Company explores a range of strategic
alternatives. The workforce reduction is expected to be completed by the end of
the first quarter of 2023.
Affected employees will be offered separation benefits, including severance
payments along with temporary healthcare coverage assistance. The Company
estimates that the severance and termination-related costs will be approximately
$1.0 to $1.1 million and expects to record these costs in the first quarter of
2023. The Company expects that payment of these costs will be made through the
second quarter of 2023. The Company's estimate of costs and the expected timing
for recording and paying those costs are subject to a number of assumptions and
actual results may differ. The Company may also incur other costs not currently
contemplated due to events that may occur as a result of, or associated with,
the workforce reduction.
Item 8.01 Other Events
On February 21, 2023, the Company issued a press release announcing that a
review of initial data from its Phase 1b chemoprotection trial of ALRN-6924 in
patients with p53-mutated breast cancer showed that patients in the trial
experienced severe neutropenia (Grade 4) and alopecia. The primary endpoint of
the Phase 1b open-label trial, which was evaluating ALRN-6924 in patients with
breast cancer receiving neoadjuvant or adjuvant treatment with docetaxel,
doxorubicin, and cyclophosphamide, or "TAC" chemotherapy, was duration and
incidence of severe neutropenia in cycle 1. Incidence of chemotherapy-induced
alopecia (hair loss) was a secondary endpoint. Based on these findings, the
Company has decided to terminate the Phase 1b breast cancer trial and further
development of ALRN-6924.
The Company also announced that it is exploring a range of strategic
alternatives to maximize stockholder value. The Company has engaged Ladenburg
Thalmann & Co., Inc. to act as a strategic advisor for this process. Strategic
alternatives that are being evaluated may include, but are not limited to, an
acquisition, a merger, a business combination, a sale of assets or other
transaction. There is no set timetable for this process and there can be no
assurance that this process will result in the Company pursuing a transaction or
that any transaction, if pursued, will be completed on attractive terms. The
Company does not intend to comment further on this process unless or until the
Board has approved a definitive course of action or it is determined that other
disclosure is appropriate.
Forward-Looking Statements
Statements in this Current Report on Form 8-K about the Company's future
expectations, plans and prospects, as well as any other statements regarding
matters that are not historical facts, may constitute forward-looking statements
within the meaning of The Private Securities Litigation Reform Act of 1995.
These statements include, but are not limited to, statements relating to the
Company's workforce reduction and the costs expected to be incurred in
connection with the workforce reduction and the outcome of the Company's
exploration of strategic alternatives. The words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intend," "may," "plan," "potential,"
"predict," "project," "should," "target," "would" and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. Actual results may
differ
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materially from those indicated by such forward-looking statements as a result
of various important factors, including whether the workforce reduction will
results in the costs and the savings anticipated; whether the Company will
identify a strategic transaction to pursue and whether such a transaction may be
consummated on favorable terms, on a timely basis or at all; and the other risks
factors discussed in the "Risk Factors" section of the Company's annual report
on Form 10-K for the year ended December 31, 2021, filed on March 28, 2022, and
quarterly report on Form 10-Q for the quarter ended September 30, 2022, filed on
November 1, 2022, and risks described in other filings that the Company may make
with the Securities and Exchange Commission. Any forward-looking statements
contained in this Current Report on Form 8-K speak only as of the date hereof,
and the Company specifically disclaims any obligation to update any
forward-looking statement, whether because of new information, future events or
otherwise.
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