Despite the significant amount of finances invested in the Bay Area biotech environment, December and January saw a significant number of job cuts.
On Wednesday, Bay Area-based Aduro Biotech announced it was cutting 37 percent of its staff, about 55 jobs, in a corporate restructuring that will allow the company to redirect those resources to its lead programs.
Earlier this month, Five Prime Therapeutics, also located in the Bay Area, initiated a restructuring that included the slashing of 41 jobs, about 20 percent of its headcount. Also this month, Bay Area biotechs uBiome and Theravance Biopharma announced job cuts. uBiome, which was founded in 2012, cut 10 percent of its staff and Theravance announced it cut 50 employees as part of a focus on the execution of strategic programs.
Across the Bay Area, there were more than 200 job cuts in January alone, the San Francisco Business Times reported. In December, there were about 400 job cuts across the region, including 83 job cuts at Genentech, the Times said.
Most of the job cuts made were not due to a lack of corporate finances, the Times noted. Many of the companies that initiated cuts have strong financial footings. However, those companies are either facing potential challenges to their revenue streams from competitors, such as Genentech, or are moving into new areas of discovery and research, requiring funding for those forays.
California’s life science industry is quite strong. A 2018 survey conducted by the California Life Sciences Association, the trade association representing California’s life sciences industry, showed just how strong the Bay Area is. Over the course of 2018, more than $3.6 billion was poured into life science companies in the Bay Area, which was more than double the $1.7 billion of VC funding in 2017, according to CLSA. Despite the latest job cuts, last year the biotech hub in the Bay Area led California with more than 82,500 life science jobs, an increase of more than 11,200 over the previous year, the CLSA survey showed.
Mike Guerra, CLSA’s new president and chief executive officer, told the Times that despite the late December and January job cuts, “the fundamentals of the Bay Area’s biotechnology ecosystem remain strong.”
In an interview with the Times following its job cuts announcement, Aduro Chief Executive Officer Stephen Isaacs confirmed that the cuts his company made were not about money. The cuts were in line with the company’s future plans regarding the development of cancer treatments. Isaacs told the Times that the company was “getting focused” on those programs it aims to chase.
