2seventy to Lay Off 40% of Workforce, CEO to Depart in Reorganization
Pictured: Illustration depicting large layoffs/iStock, Andrii Yalanskyi
2seventy bio on Tuesday kicked off a sweeping strategic restructuring initiative aimed at streamlining its business operations and R&D model—including advancing fewer pipeline programs—to generate significant savings and put the company on the path to long-term growth.
As part of the reorganization, the immuno-oncology focused biotech will eliminate 176 roles across various departments, corresponding to approximately 40% of its headcount. This will impose a one-time cost of $9 million in severance pays and other restructuring fees, but is projected to generate annualized cost savings of at least $65 million.
Between 2024 and 2025, 2seventy’s realignment initiative is expected to yield some $130 million in savings. The company will also right-size it is facilities and pare down external expenditures by 2025, designed for further cost reductions.
2seventy CEO Nick Leschly in an investor call Tuesday morning cited the “difficult and unpredictable macro environment” as the reason for the strategic reorganization.
“At the same time, we’ve seen our later-stage programs experience delays, and most recently, the impacts of a rapidly evolving and complicated Abecma commercial dynamic,” Leschly said. “The convergence of these forces has led us to make the hard, but necessary, changes to our business designed to streamline our organization and reduce spend to best enable our short- and long-term plans for 2seventy.”
Leschly will also step down as 2seventy’s CEO and will transition as chairman of its Board of Directors once a successor has been found, the company announced.
Current CFO Chip Baird will now serve as the company’s COO, which will expand his duties to cover finance, corporate development, portfolio and program management and investor relations and corporate communications.
As for its pipeline and portfolio, 2seventy will adopt a more modest earnings outlook for its multiple myeloma CAR T cell-based gene therapy Abecma (idecabtagene vicleucel). Though the company remains confident that the asset will remain profitable this year—and will “contribute significantly” towards its runway into the coming years—2seventy is now expecting lower full-year 2023 U.S. revenue for Abecma.
The company had previously pegged topline U.S. sales to be between $470 million to $570 million, which it will share equally with partner Bristol Myers Squibb.
Abecma is also up for an FDA target action date on Dec. 13, 2023, which could potentially expand its label to also cover relapsed/refractory multiple myeloma patients that had previously been exposed to at least three drug classes.
This, along with planned studies in other patient groups, could further strengthen the commercial potential of Abecma, according to 2seventy’s Tuesday announcement.
2seventy will also tighten its purse strings and adjust R&D plans for its in-house candidates. Its B cell non-Hodgkin lymphoma hopeful bbT369 will continue with its Phase I study, but the company will be “gating further investment beyond Phase I” for this candidate. Initial data for this investigational therapy are expected next year.
Meanwhile, 2seventy “plans to limit financial commitment to the current Phase I trial” of its acute myeloid leukemia candidate SC-DARIC-33, which in June 2023 was hit with a clinical hold from the FDA. The company is currently working with the regulator to resolve the pause.
All of 2seventy’s partnered pipeline assets will push through with development, with some even expanding to include new programs, the company announced.