BenevolentAI is to slash more jobs and close its US office amid a boardroom coup led by founder Ken Mulvany.
In May 2023 the MedTech announced plans to lay off 180 staff, with planned cost savings of £45m intended to extend its cash runway to at least July 2025.
However it now plans to reduce headcount by a further 30% after evaluating its business priorities. It expects to have around 180 staff at the end of 2024.
Mulvany, who founded the company in 2013, left the board 18 months ago when it listed on the Euronext exchange in Amsterdam via a SPAC merger which valued it at more than £1 billion. He retains a stake of more than 23%.
A former darling of the UK AI scene, London-headquartered BenevolentAI has since seen its shares slump by more than 90%, with a market cap today of around £85 million. Mulvany outlined “serious concerns about the company’s cost management, business development resourcing, strategy, investor relations and governance” in a recent letter to chair Dr François Nader.
He is now leading a boardroom coup which has ousted Dr Nader and non-executive directors Dr Olivier Brandicourt, Dr Susan Liautaud and Marcello Damiani. All four will resign at the company’s AGM on 2nd May 2024.
Current CEO Dr Joerg Moeller, senior independent director Jean Raby and non-exec directors Prof Sir Nigel Shadbolt and Dr John Orloff will all continue in their respective positions.
Baroness Joanna Shields OBE – a former government minister who had built the company up from a startup over five years as CEO – resigned in September amid other executive changes. Dr Nader was appointed interim CEO before Dr Moeller joined in January.
BenevolentAI recently saw its CTO leave after seven years at the firm. However it has signed a strategic collaboration with pharma giant Merck KGaA worth a potential $594m.
In a statement announcing the latest cuts, it said: “Going forward the company will focus on its AI-driven drug discovery collaboration and proprietary pipeline revenue generating pillars, following recent successes in these areas. The board believes this focus will likely bring the greatest potential return for shareholders.”
Work on its Knowledge Exploration Tools will cease, given the investment needed to fully commercialise this SaaS product and the estimated timeframe to see a potential meaningful financial return.
Cash burn will be reduced by around 20% as a result, extending the company’s cash runway to late Q3 2025 – even after partial reinvestment of the savings into studies for its lead asset, which is focused on treatment of ulcerative colitis.
“Importantly, key skills, experience and capabilities have been retained and these reductions maintain the company’s ability to execute on existing, or sign new, collaborations and continue to develop its core pipeline programmes,” it added.
“Additionally, the company will close its US office. It is imperative for the operational effectiveness of the company to have strong integration between its technology and scientific teams, and management believes this can be best achieved over its two largest sites in London and Cambridge.”
Dr Moeller said: “While these situations are always difficult, as a company we have a duty to our shareholders to optimise capital allocation in the areas where we believe the potential return is the greatest.
“BenevolentAI is an AI augmented drug discovery company uniting science and technology with the aim to develop life-changing medicines for patients.
“Therefore, I believe that focusing our organisation on furthering our drug discovery collaborations and progressing our proprietary pipeline is the best way to achieve both the goal of delivering value creation for our shareholders and delivering innovative medicines to patients suffering from very serious medical conditions.”