Bluebird bio is cutting more jobs and expenses in the latest bid to manage its fragile finances as it supports the launch of its sickle cell gene therapy Lyfgenia.
The company announced earlier Tuesday that it will lay off 25% of its workforce and cut expenses by 20%, including reductions to its R&D work. Bluebird said the cuts are “intended to optimize the company’s cost structure and enable quarterly cash flow break-even in the second half of 2025.” It had 375 employees at the end of June, according to an SEC filing.
Bluebird’s struggles come amid a larger industry downturn in cell and gene therapies, as companies face questions on how to turn a profitable business around these one-time therapies that are often for rare diseases. Several large biopharma companies, including Pfizer, have whittled down their programs.
Andrew Obenshain“While we have faced the trials and tribulations of being a pioneer, first in R&D and now commercially, we believe we are well on our way to showing that a standalone gene therapy company can achieve financial sustainability,” bluebird CEO Andrew Obenshain said in an analyst call Tuesday morning.
But bluebird’s market value on Monday sat at around $95 million, when the company was once worth as much as $10 billion. The company’s shares, now worth roughly $0.50 apiece, jumped 5% $BLUE in premarket trading Tuesday morning.
“Initial reductions are already underway,” chief financial officer James Sterling said on Tuesday’s call. “The reductions to our workforce and external spend are being made across the entire organization, with the greatest impacts on our G&A and R&D functions. With three gene therapies now on the market commercially, this enables us to focus our spending on imperative commercial activities.”
James SterlingIn August, bluebird was forced to renegotiate terms of around $50 million in loans from Hercules Capital that it needs to continue to fund its operations, as a result of a slower-than-expected launch around its sickle cell gene therapy.
In December, bluebird and Vertex won approvals of their respective one-time sickle cell therapies. Bluebird also markets two other gene therapies in the US: Zynteglo for beta thalassemia and Skysona for a rare genetic disorder called cerebral adrenoleukodystrophy.
In 2022, bluebird laid off 30% of its staff as it was awaiting the US approvals of its first gene therapies.
Bluebird said Tuesday there have been 41 patient starts across its three gene therapies this year, up from the 27 it last reported in mid-August. Bluebird noted it can take four to six months to generate cash and revenue following patient starts. The company is projecting 85 patient starts across its gene therapies in 2024, including an expected 40 in the fourth quarter of the year.
Vertex reported in August that around 20 patients have started the process to receive its gene-edited sickle cell therapy.
Editor’s note: This story has been updated throughout with details from an analyst call and additional background information.