What a Biotech Owes Its Team When a Program Is Cut
When a biotech cuts a program, the people running it usually leave with it, and the leadership team is expected to spend its own network placing them. That happens even at companies that are not in trouble. David Esposito, President and CEO of ONL Therapeutics, described this on Open Door Salon as the hardest decision he has faced recently, and the circumstances are worth being precise about: his company has runway, is not facing a cliff, and cut programs anyway because resources are finite. Nobody working on those programs did anything wrong.
Why does a company cut a program it can still afford?
Because resources are finite even when they are not scarce, and prioritization is how a pipeline gets through. Esposito is explicit that this is not a distress scenario.
"it's not like you're closing the door in the company, you're not, you just have to prioritize things because resources are limited"
The mechanism he describes is pruning: cutting programs that are performing acceptably so the lead program gets what it needs to reach its next milestone. Some of that pruning happens on the schedule of a plan, and some of it is forced by data arriving earlier than expected.
"You basically got to prune some of those to keep going on a couple of your prioritized program."
Why is this harder than a layoff driven by cash?
Because there is no external reason to point at. When a company runs out of money the decision explains itself. When a company with runway cuts a strong team working on a viable program, the explanation is a portfolio judgment, and the people affected are being moved not because their work failed but because something else was ranked higher.
Esposito does not soften that, and he does not present it as resolved:
āIād say you just sleep with those.ā
He describes the prioritization at ONL as having happened around a year and a half ago, and the decisions that followed it as very recent. Both are true at once, which is what makes this category of call different from a layoff with a date on it.
What does the company owe the people who leave?
Active placement, using the network. Esposito treats this as part of the leadership job rather than a gesture.
"even if you have to make those difficult decisions on transitioning people out of the company, you do all you can to find them a good spot."
In practice that means the leadership team, the board and the investors work their contacts on behalf of people who no longer work there. He describes the biotech ecosystem as something that does this continuously, because programs end constantly and the same people move between companies for decades.
"Everybody knows at the end of the day, some rough and tumble things could happen in a biotech. It's just part of the way it is."
Does the culture built beforehand actually matter?
It determines whether the conversation is survivable. Esposito's argument is that clarity of communication before a decision is what makes the decision land as a business reality rather than a betrayal. A team that has been told what the environment is, what the plan depends on, and what could go wrong is a team that can hear a cut without concluding it was hidden from them.
The same discipline applies upward. He treats candor with the board and the investors as non-negotiable once a decision is visible.
Who else is affected beyond the employees?
The earliest backers, who are frequently not institutions at all. Esposito points out that the seed capital under many companies is personal.
"A lot of times when you're scraping together an early seed angel round, it's friends, family."
That changes the character of the communication. Reporting a portfolio decision to a fund is a professional exchange. Reporting it to people who wrote personal checks because they believed in a founder is a different conversation, and one reason experienced operators treat conduct through a downturn as reputationally decisive.
How does this connect to how investors judge a founder?
Directly. Investors are already assessing how a founder handles the parts of the job that are not the science, which is the subject of a separate conversation about what investors actually evaluate. A leader who cuts a program cleanly, communicates it early and places the affected team is demonstrating the thing that is otherwise hard to assess from a pitch.
The same judgment sits underneath the larger call about whether a company should pivot or close, and underneath the signals that appear well before either. Esposito's account suggests the people question is not the final step in that sequence. It is present at every stage, and it is the one leaders carry afterward. When the decision is a closure, a second obligation runs in parallel, to patients still on therapy.
Brands that want to reach operators making these calls can work with Open Door Salon.
Drawn from the recorded, on-the-record conversation with David Esposito and Pavel Khrimian on Open Door Salon. Quotes in this post are Esposito's, verbatim from the episode transcript.
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