Rain Oncology will cut 65% of its staff as it suspends enrollment in its Phase 2 MANTRA-2 trial for milademetan, a drug targeting advanced or metastatic solid tumors, the company announced Tuesday.

Rain is also halting plans to launch a Phase 1/2 MANTRA-4 combination trial in efforts to “optimize company resources” and extend its cash runway through 2026.

The news comes after Rain recently released topline results from its Phase 3 MANTRA trial, which showed milademetan failed to reach its primary endpoint of progression free survival versus standard of care in patients with dedifferentiated (DD) liposarcoma (LPS).

Milademetan, which Rain acquired from Daiichi Sankyo in 2020, received orphan drug designation from the Food and Drug Administration in 2017 for LPS.

“We are very disappointed in the outcome of the MANTRA trial, as the results did not closely mirror prior clinical results in patients with DD LPS,” Avanish Vellanki, co-founder and CEO at Rain, said in a statement. “We are truly saddened we will not likely be able to offer patients new treatment options for this challenging disease.”

The results marked a slowdown for the company’s development of milademetan and yet Vellanki doubled down on Rain’s commitment to continue “evaluating” the full data and “the path forward for milademetan.”

“We are working diligently, as additional information continues to come in, to analyze and understand the outcomes in the Phase 3 MANTRA study in DD LPS,” Vellanki said. “It is imperative we understand those outcomes before allocating further capital to the milademetan program, with corporate expenses to be greatly reduced to maximize optionality for Rain.”

Rain plans to continue evaluating the Phase 3 MANTRA data and present those findings at a medical conference later in the year. The company also noted it will seek opportunities to grow out its pipeline through precision oncology program acquisition.

As part of the restructuring, chief medical officer Richard Bryce will transition to an advisory role. Robert Doebele, the company’s co-founder, president and chief scientific officer, will replace Bryce in the chief medical officer role.

“Rain will make meaningful reductions in our workforce,” Vellanki said. “It was the tremendous effort of our Rain colleagues that allowed us to execute on MANTRA ahead of schedule despite the extreme pressures of the pandemic.”

In light of the strategic realignment, stock brokerage firm EF Hutton cut Rain’s price target from $5 to $2, but maintained its ‘Hold’ rating.