Orchard Therapeutics Cuts 25% of Staff as it Shifts Clinical Focus


Shares of Orchard Therapeutics fell more than 13% in premarket trading after the company announced a new strategic plan that includes the shifting of its clinical focus, the shuttering of a proposed manufacturing facility in California and the termination of 25% of company staff.

On Thursday, London-based Orchard announced the new plan that will shift the company’s clinical priorities away from some of its long-time focuses, including a stem cell gene therapy for the treatment of severe combined immune deficiency due to adenosine deaminase deficiency (ADA-SCID) and other ultra-rare conditions. Instead, Orchard said it will now focus its development priorities on more common conditions that include Crohn’s disease, a type of dementia and some neurometabolic disorders. Among those are the development of a treatment for metachromatic leukodystrophy (MLD), a rare and life-threatening inherited metabolic disease. Another priority will be its treatment for Wiskott-Aldrich syndrome (WAS), a life-threatening immune disorder. Orchard will also continue to develop its treatments for mucopolysaccharidosis types I and IIIa.

The shifts in Orchard’s plans were announced a couple of months following a management change. In March, company founder and Chief Scientific Officer Bobby Gaspar took over the helm of the company from Mark Rothera, who led Orchard since 2017.

“I feel privileged to lead Orchard as we embark on this new chapter, which is rooted in fulfilling the powerful possibilities for HSC gene therapies beyond ultra-rare diseases,” Gaspar said in a statement. “Moving forward, we are focusing on advancing therapies for high need and high-value diseases, and our work in neurometabolic disorders is a clear example of this. We’re also excited to announce new research programs which we believe will demonstrate the breadth of the HSC platform approach.”

Orchard said it intends to adjust its manufacturing plans to focus on the expected regulatory approvals of OTL-200, the MLD treatment and its WAS drug, OTL-103. The company hopes to obtain approval in the European Union for OTL-200 for the treatment of MLD in the second half of 2020 and launch in the first half of 2021. Orchard is also preparing a Biologics License Application for its WAS treatment in both the U.S. and EU in 2021.

Orchard said it also intends to stop its plans to build a gene therapy manufacturing facility in Fremont, Calif. That project was first announced in 2018.

The culling of one-fourth of its employees is expected to save the company approximately $125 million through the end of 2021. That will extend the company’s existing cash runway into 2022, Orchard said. Cash, cash equivalents and investments as of March 31, were $263.9 million compared to $325.0 million as of Dec. 31, 2019.

Frank Thomas, Orchard’s chief operations officer, called the strategic shift and layoffs “necessary steps” for the company to achieve its objectives “by matching our attention and resources to a set of core imperatives for the business.”

“I believe that these are necessary steps, especially in light of the current environment in which we are operating, with focused investments in areas such as commercial and manufacturing operations supporting the needs we have now without a near-term dependence on the capital markets,” Thomas said in a statement.

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