- Gene therapy developer Bluebird bio will lay off about 30% of its employees in a restructuring plan aimed at keeping the struggling company solvent into the first half of next year.
- The restructuring, announced Tuesday, will reduce Bluebird's 2022 operating costs by 35% to 40% and save $160 million over the next two years. The company now expects its cash burn to be less than $340 million this year, slightly less than what it currently has on hand.
- The workforce reduction "cuts across all parts" of the company, while they will be concentrated in Bluebird's administrative, research, process and sales teams, chief communications officer Sarah Alspach said in an email. The company employed 518 full-time staff at the end of January, according to a regulatory filing.
Bluebird, for years a leading gene therapy developer, entered 2022 in financial peril.
A string of clinical, regulatory and commercial setbacks lengthened the company's road to profitability, while its research spending has remained elevated. At the same time, Bluebird's share price has tumbled over the past year, making it more difficult to raise cash on the public market.
Even as Bluebird soon may win Food and Drug Administration approval for two gene therapies, the company last month warned investors there was "substantial doubt" about its ability to remain solvent though the end of 2022. Its top financial executive, Gina Consylman, resigned.
Bluebird is counting on those approvals, and the special vouchers it could receive if the FDA clears both products, known as beti-cel and eli-cel. The vouchers, which speed up drug reviews, are awarded to the developers of drugs for certain neglected or rare diseases and can be sold for tens of millions of dollars.
Still, the FDA approvals aren't certain. The two drugs, developed for rare blood and brain diseases, respectively, have been slowed in the past by safety concerns and testing of eli-cel is currently on hold. They're being evaluated at a two-day meeting of FDA advisers in June, which could influence the FDA's review. The agency previously pushed back its target decision dates for both medicines.
With its future in the balance, Bluebird has turned to reducing costs. The restructuring announced Tuesday is aimed at getting Bluebird through the FDA's decision dates for beti-cel and eli-cel, as well as the submission of an FDA application for lovo-cel, a potential drug for sickle cell disease. In addition to cutting jobs, Bluebird also is narrowing its research and ending investment in projects aimed at making gene therapies safer to administer and easier to produce.
The company said it will maintain some "targeted" research on so-called in vivo gene therapy, which involves treatments that modify genes inside the body. (Beti-cel, eli-cel and lovo-cel are made from patient cells genetically engineered in a laboratory.)
Bluebird is still evaluating other options, including "public or private equity financings," the company said. Bluebird's shares trade about $5 apiece, a fraction of the nearly $180 peak they reached in 2018.
Bluebird's restructuring is the latest in a series of retrenchments by gene and cell therapy developers during the biotech sector's steepest downturn in years. For example, this past week Orchard Therapeutics and Taysha Gene Therapies also announced layoffs.