The multiple R&D, regulatory and commercialization setbacks have hit home for bluebird bio. Hoping to keep the business afloat, the gene therapy specialist has brought out the cost-cutting ax.
Bluebird bio will cut 30% of its workforce in the hopes of extending its cash runway into the first half of 2023, the company revealed Tuesday. As of Jan. 31, the Massachusetts biotech counted 518 full-time employees, according to its annual report.
The move comes shortly after the company warned of its dire financial situation in March. The cost-cutting scheme aims to keep bluebird’s doors open in anticipation of delayed FDA decisions for its two star-crossed gene therapy candidates, beti-cel and eli-cel, this fall.
The job cuts will affect all parts of bluebird, Chief Strategy and Financial Officer Jason Cole said during a conference call Tuesday. But the measure will strike hardest for the research team, longer-term product differentiation efforts, near-term launch preparations and general and administrative teams, he said.
Laying off employees will cost bluebird about $10 million, the company said. But through the restructuring, bluebird plans to save $160 million in annual costs over the next two years. For 2022 specifically, the initiative will reduce the company’s cash burn to less than $340 million. Without any marketed product, bluebird had about $396.6 million in cash as of end of 2021, its annual report shows.
Unexpected, repeated trip-ups, combined with a “tough biotech market,” forced bluebird’s hand, CEO Andrew Obenshain said during Tuesday’s call.
“The combination of these has taken the traditional financing off the table in the near term,” Obenshain said. “We’re optimistic that these options may be viable sources of funding in the future, but we recognize the need for action today.”
Besides pinching pennies, bluebird also hopes it can get some cash from selling two priority review vouchers, if beti-cel and eli-cel are approved. The company previously projected that the vouchers could generate up to $200 million.
The FDA in January pushed back its decisions on beti-cel in beta-thalassemia and eli-cel for cerebral adrenoleukodystrophy by three months to Aug. 19 and Sept. 16, respectively. And to clinch those go-aheads, bluebird will need to jump through another set of hoops: two consecutive FDA advisory committee meetings, which the company expects on June 9 and 10.
The delay came after a partial clinical hold for beti-cel’s sister med, lovo-cel, for sickle cell disease, in patients younger than 18. The FDA suspended that work when one adolescent patient developed persistent anemia after treatment. For lovo-cel, bluebird reconfirmed that it plans to file for FDA approval in the first quarter of 2023.
All told, the three rare disease therapies could treat 22,000 patients in the U.S., according to Obenshain.
Entering 2022, bluebird was already hobbling. In addition to the lovo-cel clinical hold, the company had been forced to close shop in Europe after failing to reach reimbursement agreements for beti-cel—sold there under the brand name Zynteglo—and figured it would be similarly difficult to market eli-cel, known as Skysona.
Now, the company is streamlining launch preparations for the three near-term products in three ways, Cole said, including interactions with payers on reimbursement and access, enabling treatment for a targeted QTC network of healthcare providers, and developing patient services “to ensure a positive patient and caregiver experience.”
As part of the overhaul, bluebird will focus its research efforts on in vivo lentiviral vector gene therapies, starting with sickle cell disease, Obenshain said. It will shelve direct investments in reduced toxicity conditioning and cryopreserved apheresis, he added.