Aerovate Therapeutics to Cut Workforce by 78%

Aerovate Therapeutics to Cut Workforce by 78%

Amara Singh
2 min read

Aerovate Therapeutics' Troubles: Layoffs and Trial Failure

Aerovate Therapeutics is facing a major setback as it plans to reduce its workforce by 78% following the failure of its Phase IIb trial for the pulmonary arterial hypertension (PAH) drug AV-101. The Massachusetts-based biotech company disclosed this decision in an SEC filing, projecting a cost of $5.6 million for the layoffs, to be incurred throughout the third and fourth quarters of 2024.

The company's stock price has drastically plummeted by over 90% after the unsuccessful trial, which did not meet its primary endpoint for improvement in PAH compared to placebo for any of the studied doses. Furthermore, AV-101 failed to demonstrate significant enhancements in the secondary endpoint of change in six-minute walk distance. Consequently, the Phase III and long-term extension arms of the trial have been terminated.

Key Takeaways

  • Aerovate Therapeutics is set to lay off 78% of its workforce due to the failure of the AV-101 drug trial for PAH treatment.
  • The company anticipates incurring $5.6 million in costs associated with the layoffs in the third and fourth quarters of 2024.
  • The company's stock price has witnessed a drastic decline of over 90% subsequent to the Phase IIb trial failure of AV-101 for PAH.
  • The PAH treatment market has become more competitive with the recent FDA approvals for alternative drugs.
  • AV-101, an inhaled version of imatinib designed to administer therapy directly to the lungs, failed to demonstrate efficacy.


Aerovate Therapeutics' substantial reduction in workforce and the setback of AV-101's trial underscore the escalated level of competition in the PAH market and the risk faced by investors. The $5.6 million cost of layoffs and the sharp decline in stock value has significantly impacted both shareholders and employees. In the short term, Aerovate is encountering financial strain and reputational damage. In the long term, the company will need to pivot to avoid the risk of becoming obsolete in light of the increasing options for PAH treatment. Investors and competitors, such as MSD and Johnson & Johnson, may take advantage of Aerovate's setback, thereby reshaping the dynamics of the market.

Did You Know?

  • Phase IIb Trial: A Phase IIb trial is a critical stage in the clinical trial process, involving the testing of a drug on a larger group of people (hundreds) to gather more precise information about its effectiveness, optimal dosage, and potential side effects. This phase assists in determining the drug's efficacy for its intended use and its safety profile.
  • Pulmonary Arterial Hypertension (PAH): PAH is a rare and severe condition characterized by high blood pressure in the arteries of the lungs, resulting in strain on the heart as it works harder to pump blood through the narrowed blood vessels. This condition can decrease the amount of oxygen reaching the rest of the body, leading to various symptoms and complications.
  • Series A Funding: Series A funding represents the initial significant round of capital invested in a startup after the initial seed funding. This funding is typically sought by companies that have developed a product prototype or an initial version of their service and are ready to scale up their operations. Investors in Series A funding usually expect the company to have a clear business model and potential for growth.

You May Also Like

This article is submitted by our user under the News Submission Rules and Guidelines. The cover photo is computer generated art for illustrative purposes only; not indicative of factual content. If you believe this article infringes upon copyright rights, please do not hesitate to report it by sending an email to us. Your vigilance and cooperation are invaluable in helping us maintain a respectful and legally compliant community.

Subscribe to our Newsletter

Get the latest in enterprise business and tech with exclusive peeks at our new offerings