Former Celgene spinout Celularity has warned it may lay off “a substantial portion” of its workforce as part of a restructuring plan that will deprioritize two cancer treatments.
The New Jersey-based cell therapy and biomaterial products maker said Thursday it “is hopeful there will be no need to substantially reduce its headcount” but notified the employees at risk of layoffs to be transparent and meet disclosure requirements.
The biotechnology company will not advance two programs that use “natural killer,” or NK, cells to treat an aggressive form of brain cancer called glioblastoma multiforme and HER2-positive gastric cancer. It will continue to review trial data for an experimental NK cell therapy targeting relapsed or refractory acute myeloid leukemia.
Celularity is also assessing off-the-shelf therapies derived from human placental tissue for Crohn’s disease and a type of muscular dystrophy. A Phase 1 trial of an experimental CAR-T therapy targeting CD19-expressing cancer cells will begin this year, the company said.
Celularity spun out from Celgene in 2017 and raised $372 million through a SPAC merger in 2021. Its cell therapies are centered around placental-derived stem, progenitor and immune cells.
“As we invest to scale production of our commercial biomaterial products to meet expected demand in the United States and the Middle East, we are prioritizing our most promising cell therapy product candidates and programs, and are rebalancing our workforce and identifying targeted expense reductions to support these priorities,” CEO Robert Hariri said in a statement.
The announcement makes Celularity at least the 11th biotechnology company to make or warn of job cuts this year, coming days after microbiome drug developer Finch Therapeutics laid off 95% of its workforce. It also follows job cut announcements from three other cell therapy biotechs — Fate Therapeutics, Century Therapeutics and TCR2 Therapeutics — in the first week of the year.
Shares in Celularity rose by around 3% in Friday morning trading. At about $1 apiece, the stock has shed roughly 90% of its value since the SPAC deal.
The company warned of its dwindling cash position in November, saying it only had $42 million of cash on hand as of Sept. 30, enough to fund operations into the first quarter of 2023. The company last disclosed it had 225 full-time employees at the end of 2021.