- Gene therapy developer Avrobio on Wednesday said it will stop further development of its experimental medicines and explore alternative business options, such as a sale.
- As a result of the change in direction, Avrobio will reduce its workforce by 50%. Remaining employees will focus on winding down the company’s research and fulfilling a recent deal with Novartis, which in late May paid nearly $90 million to buy one of Avrobio’s three clinical-stage gene therapies.
- The decision is a retreat for Avrobio, a seven-year-old biotechnology company that specializes in treatments built from patients’ own stem cells. Its focus has been on so-called lysosomal storage disorders, like Gaucher disease and Pompe.
Avrobio was one of many gene therapy biotechs to launch in the latter half of the last decade, as scientific advances fueled a surge of interest and investment in medicines that use genes to treat disease.
But the company’s prospects have dimmed over in recent years, during which time its market value has steadily eroded. After a spike on Wednesday’s news, Avrobio shares now trade for a little over $1 apiece, a small fraction of the $19 they were worth in the company’s 2018 initial public offering.
One setback came early last year, when Avrobio announced it would stop work on what was then its most advanced gene therapy after disappointing clinical trial results. That decision triggered a restructuring and layoffs for about a quarter of the company’s workforce.
Since then, Avrobio has faced the same challenging market that’s curtailed the funding options available to research-stage biotechs, scores of which have been forced to cut costs and trim staff. For gene therapy developers, the retrenchment has come even as the field delivered notable successes and regulatory approvals.
Geoff MacKay, Avrobio’s founding CEO until his departure in May, noted some of those challenges in a January interview with BioPharma Dive.
“The data will eventually pull the public markets along, but it may take a long time,” he wrote in an email then. “Until then, this tough financing environment will spur more restructuring, consolidation, pipeline reprioritization, M&A, market de-listings and, unfortunately, bankruptcies.”
Avrobio, in its statement Wednesday, said its review may not result in any transaction and has not set a timetable for completing the search for options.