Jeff Borcherding, CEO and President of Immunovia, a diagnostic company, decided shortly after taking the helm in April 2023 that significant changes were necessary. By summer, the company had moved its US headquarters and lab from Marlborough, Massachusetts, to smaller quarters in Research Triangle Park (RTP), North Carolina, and closed its production facility in Lund, Sweden.

Moving to a smaller lab in RTP is a key aspect of our ongoing efforts to be a leaner and more efficient company.

The finance and information technology departments have remained in Sweden, but Immunovia had to lay off its sales and customer service team in the US and transition some full-time employees to contract roles.

“Moving to a smaller lab in RTP is a key aspect of our ongoing efforts to be a leaner and more efficient company,” Borcherding said at the time the decision was announced.

Personnel numbers decreased from more than 60 to about a dozen. “It was pretty wrenching,” Borcherding says. “We had to say goodbye to a lot of good people and make difficult decisions.”

Critical reductions

The company’s cost structure wasn’t sustainable, Borcherding says, in explaining the decisions. “We had to make significant cuts based on our cash position and the challenging fundraising environment. We also needed to make important strategic changes.”

The reductions have been critical in helping Immunovia meet its goals, according to Borcherding. “Without these changes, we would not have survived,” he says. “By cutting costs and focusing on research and development, we’ve been able to develop a high-performance, next-generation test for detecting pancreatic cancer.”
In August, Immunovia announced it had completed development of its next-generation test for detecting early stage pancreatic cancer, reporting sensitivity of 85% and specificity of 98%.

“We’re doing a clinical study in the fourth quarter of this year to confirm the test’s accuracy that we’ve seen in earlier studies,” Borcherding continues. “We hope to launch the test in the US in 2025. We’re focusing on the commercial market in the US because of the size of the market and the regulatory approval process.”

The staffing reductions were linked to key strategic decisions by the company, which included discontinuing the company’s first-generation product to focus on refining the pancreatic cancer test and shifting from a proprietary testing platform to a commercially available one, to increase performance and further trim expenses. Immunovia is also using more consultants from outside the company.

We needed a better blend of internal and external resources.

“We needed a better blend of internal and external resources,” explains Borcherding.

These moves cut Immunovia’s operating expenses by about half, and personnel costs by more than 70 percent. The additional resources were focused on research and allowed the company to complete development of the test to detect stage 1 and stage 2 pancreatic cancer.

“We would not have been able to continue the same level of spending without the reductions,” he says. “We made difficult decisions, but it helped us reach our goals and it was the best decision for our investors.”

Tough decisions pay off sooner than expected

Luckily, the changes made Immunovia more appealing to investors. The company announced in September that it successfully had raised capital through a shareholder rights issue.

The new money, and Immunovia’s lower cash burn rate, are expected to fund the company through its next key milestone.

The new money, and Immunovia’s lower cash burn rate, are expected to fund the company through its next key milestone: the completion of a clinical study to validate the performance of the company’s next-generation pancreatic cancer test.

“It enables us to accelerate the development of our next-generation test, ” explains Borcherding. “It was the key driver of investor interest, For investors, it was important to see how we took steps to reduce cash burn rate.”

Leaders must take action

The forced restructuring of Immunovia showed Jeff the importance of being decisive and acting quickly when changes clearly are necessary.
“It’s critically important to communicate early and transparently with employees,” he says. “I’d had several conversations with employees and gave people an understanding of the rationale. I want to see them land on their feet and help them do that.”

Leaders must take action. It’s important for the board of directors to get involved, they were critical in helping us decide what to do and how to do it.

He would advise other CEOs not to hesitate too long before making tough decisions. “Don’t wait and hope that the funding environment will improve. Leaders must take action. It’s important for the board of directors to get involved, they were critical in helping us decide what to do and how to do it. Get lean. You must preserve cash. Focus on execution. You must achieve milestones to support future capital raises,” he advises.

And, unfortunately, capital is still hard to acquire. “The market is challenging. Investors are understandably cautious, especially in life sciences, where the timelines for achieving results are often longer,” says Borcherding.