Bluebird Bio said today that it will eliminate about 30% of its staff during the second and third quarters as part of a restructuring plan designed to generate $160 million in savings over the next two years.
A company spokesperson would not confirm to GEN exactly how many jobs would be eliminated. However, the number could be estimated at 155, based on 30% of the 518-employee workforce as of January 31 that Bluebird disclosed in its Form 10-K annual report for 2021, filed March 4.
“The workforce reduction cuts across all parts of bluebird, with the most significant concentration in our General & Administrative, research, process innovation and commercialization teams,” the spokesperson told GEN this morning.
As a result of the job reductions, “the Company estimates that it will incur aggregate charges of approximately $10 million in one-time cash expenditures for severance and employee termination-related costs,” Bluebird stated today in a regulatory filing.
The job cuts are the latest blow for Bluebird, which last month acknowledged in its Form 10-K: “There is substantial doubt regarding our ability to continue as a going concern.”
Also in March, the company acknowledged that Gina Consylman, the company’s CFO and treasurer, had given notice of her resignation, effective April 3—just seven months after she joined the company as CFO of its severe genetic business.
Consylman has been succeeded by Jason F. Cole in the combined role of Chief Strategy and Financial Officer and Treasurer, and principal financial officer—an appointment made by the company’s board on March 25. Cole was previously Bluebird’s Chief Business Officer.
Today, Bluebird said that the restructuring is expected to extend its cash runway into the first half of 2023 by slowing down its cash spending or “burn” to less than $340 million through a 35% to 40% percent reduction in operating costs that the company anticipates will be realized by the end of this year.
“While the anticipated cost savings incrementally extend cash runway, the reduction in personnel ahead of three potential gene therapy launches will likely negatively impact commercial execution, despite best efforts to streamline launch preparations in the restructuring,” Mani Foroohar, MD, senior managing director, genetic medicines, and a senior research analyst with SVB Leerink, wrote today in a research note.
Investors continued to sell off Bluebird shares, which fell 2% in trading today, to $5.13 as of 12 p.m. ET. Shares of Bluebird Bio have plummeted more than 60% since the company spun off its oncology business in November.
That business consisted of 13 oncology programs (seven clinical, six preclinical) spun into 2seventy bio, headed by “Chief Kairos Officer” Nick Leschly—who served as Bluebird’s CEO or “chief Bluebird” from 2010 until the separation, which left the surviving Bluebird with three candidates and an R&D focus on severe genetic diseases.
“Today is a tough yet important day for Bluebird,” CEO Andrew Obenshain told analysts on a conference call this morning. “Following a thorough review, we’ve concluded that our mission of ultimately bringing potentially curative gene therapies to patients and their families in the U.S. means that we need to think differently about our business and our strategy for the future.”
Obenshain added in a statement: “We are taking decisive action to extend our cash runway, and put Bluebird in a stronger position to execute on our strategic priorities and ultimately bring potentially curative gene therapies to patients and their families.”
Comeback strategy
Those priorities, Obenshain and Bluebird restated, include two pillars of the comeback strategy he detailed to GEN Edge in November 2021: Pursue approvals and commercialize the three severe genetic disease candidates in its pipeline; and maintain the company’s commitment to lentiviral vector (LVV) gene therapies, while investing in extending its core LVV platform into direct in vivo LVV.
Biologics License Applications (BLAs) for two of Bluebird’s gene therapies are under FDA review: Betibeglogene autotemcel (beti-cel), the company’s potentially curative gene therapy for adult, adolescent, and pediatric patients with β-thalassemia across all genotypes who require regular red blood cell (RBC) transfusions; and elivaldogene autotemcel (eli-cel), a gene therapy for cerebral adrenoleukodystrophy in patients less than 18 years of age.
The FDA has set PDUFA target decision dates of August 19 for beti-cel and September 16 for eli-cel. The therapies are expected to be reviewed in consecutive FDA advisory committee meetings tentatively scheduled for June 9 and 10.
If approved, beti-cel and eli-cel will be the first ex-vivo LVV gene therapies available in the U.S.
Obenshain and Bluebird have said that the company plans to invest in extending its core LVV platform into direct in vivo LVV, in which the company has what Obenshain has termed a “pretty exciting” early-stage research program that could be relevant for several target organs: A therapeutic payload (viral or non-viral) is delivered directly into the patient’s body and targeted to the tissue that has defective cells in vivo, the company explained in a September 2021 presentation.
The company is sticking to its anticipated timeframe of the first quarter of 2023 to submit a BLA for its third gene therapy candidate, lovotibeglogene autotemcel (lovo-cel; formerly LentiGlobin® or bb1111) for sickle cell disease (SCD).
Both lovo-cel and eli-cel are under FDA clinical holds imposed last year following a series of clinical setbacks.
During a conference call with analysts, Bluebird executives acknowledged that the ability to achieve profitability will depend on the ability to gain approvals for and commercialize the SCD gene therapy program. According to Faroohar, a BLA submission in early 2023 would result in an anticipated decision for approval of lovo-cel in SCD in late 2023 or early 2024, “well beyond the scope of the current cash runway.”
Under Obenshain, who became Bluebird’s CEO last fall, the company has also committed itself to exiting Europe following disputes with European payers on pricing for its gene therapies—as well as to cutting costs.
Bluebird finished 2021 with a net loss from continuing operations of $562.6 million on revenue of just $3.7 million, compared to a $561.1 million net loss from continuing operations for 2020, a year during which it recognized no revenue from continuing operations.
The company’s accumulated deficit stood at $3.72 billion as of December 31.
During Q4, Bluebird reported a $132.3 million net loss from continuing operations, with only $1.6 million in revenue, compared with $136.3 million and no revenue in 2020.
Bluebird said its cost savings and extended cash runway are designed to bring bluebird through its upcoming clinical and regulatory milestones while the company continues to evaluate additional financing options.
Those options, Bluebird said, include public or private equity financings and monetizing any priority review vouchers (PRVs) that may be issued upon approval of beti-cel or eli-cel.
Sales of PRVs from either of these approvals can extend Bluebird’s cash runway beyond approximately one year, Mani Foroohar, MD, senior managing director, genetic medicines, and a senior research analyst with SVB Leerink, wrote March 6 in a research note.