Biotech company Artiva Biotherapeutics plans to lay off roughly 94 percent of its workforce and abandon its cell therapy treatment for rheumatoid arthritis after clinical trial data showed a lack of long-term benefits and two patient deaths.

Data gathered during clinical trials showed AlloNK—an off-the-shelf therapy that targets and kills B cells in treating autoimmune diseases—was initially effective, the San Diego-based company stated in an Oct. 27 press release. However, updated longer-term data did not show enough benefits to justify further development.

As such, plans for a Phase 3 trial have been dropped, and the company has filed a Worker Adjustment and Retraining Notification (WARN) notice with the California Employment Development Department confirming the incoming layoffs. The layoffs are expected to impact more than 100 staff members.

“After careful consideration, we have made the difficult decision to discontinue development of AlloNK and to pursue strategic alternatives,” Dr. Fred Aslan, chief executive officer of Artiva Biotherapeutics, said in the press release. “Throughout the development of AlloNK, the safety and well-being of patients have remained our highest priority.”

The company said one study participant passed away during the Phase 2a trial.

After receiving treatment as part of the study, the unnamed patient experienced a fatal case of leukoencephalopathy, a broad term for neurological conditions that impact the white matter of the brain.

An investigation found that the death was likely due to fludarabine-associated neurotoxicity. Fludarabine is often given as part of chemotherapy treatment for cancer, and it was part of the study protocol, but it can damage the nervous system and cause the body to attack its own blood cells.

The company stated that the second patient’s death was unrelated to AlloNK and the clinical study, although the cause of death is still undetermined.

The second patient passed away two months after starting the study treatment.

“We are deeply saddened by the deaths of two patients who participated in our clinical studies and extend our sincere condolences to their families,” Aslan said. “We plan to provide findings from the first case, which was assessed as likely related to fludarabine toxicity, given its widespread use in cell therapy conditioning regimens.”

Artiva said its next steps include corporate restructuring and working with the U.S. Food and Drug Administration, investigators, and institutional review boards to properly close out its clinical development program. The company plans to continue safety monitoring and reporting as required.

The discontinuation of AlloNK studies comes just five months after Artiva raised around $300 million from investors. The company originally had plans to use the proceeds to initiate and execute its Phase 3 clinical trials.

In response to the decision to discontinue AlloNK, company executives are now evaluating options to maximize stockholder value, potentially including a merger, sale or licensing of assets, business combination, or dissolution and liquidation.

Artiva is also canceling plans to present its previously announced clinical data at ACR Convergence 2026 and is canceling a Nov. 9 investor webcast.

Founded in 2019, the biotechnology company aims to develop cell therapies for patients with autoimmune diseases through B-cell depletion.

Artiva held around $319.1 million in cash and investments as of Sept. 30, according to the company’s federal SEC filings. During the wind-down phase, the company expects to face potentially high costs related to workforce reduction, discontinuation of clinical trials, leases, and other liabilities.

Artiva Biotherapeutics shares plummeted 31 percent from $6.16 on Monday to around $4.23 on Tuesday following the announcement.