February 10, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW ORLEANS — Five months after announcing an expansion of 425 employees, Renaissance RX, a personalized medicine firm specializing in genetic testing, is instead cutting staff in response to some financial woes.
The cuts are coming after government funding was pulled from a Medicare study of 250,000 patients, according to reports. The study would have created a database to track how patients react to various medications, mirroring a similar proposal by the National Institute of Health to track more than 1 million patients. Since its founding in 2012, Renaissance RX has grown from five employees to about 80.
The company specializes in determining how individual patients will respond to various medications based on their genetic makeup, a practice called personalized medicine that has received national support from the White House and the National Institute of Health. The structure of personalized care will allow physicians to choose the right medication to target a genetic defect causing an illness, such as cystic fibrosis. Current cancer genome research has provided greater understanding of the molecular changes that occur in many cancers. Such information is shaping the way those cancers are treated in individual patients.
“Over the next decade, personalized medicine will be common practice. We will live in a world where virtually all healthcare decisions will consider a person’s genetics,” CEO Tarun Jolly said in a 2014 press release announcing the planned expansion that would have resulted in 425 new jobs.
However, that expansion is on hold, at least for now. A company spokesperson said a 2014 restructuring of the company which prompted a review from Medicare. That review, and the loss of federal funding, led to layoffs, spokesperson Amy Dye said in a statement. She added she did not think the layoffs will continue throughout the rest of the year. However Dye did not say how many employees were laid off.
In September the company announced plans to add 425 workers to its New Orleans site as part of an $8 million investment in a new headquarters. Two months later the company announced TPG Growth was investing $50 million into the company in return for a 20 percent stake in the business. The investment was touted as being able to help the company reach more patients with improved healthcare testing as well as strengthen Renaissance Rx’s “ability to develop new advances in individualized medicine,” Jolly said in a press release.
State economic development Secretary Stephen Moret told The New Orleans Advocate that Renaissance expects to resume the plans within months. He says it’s working out a reimbursement issue with a claims processor. In addition to its funding woes, former Renaissance interim CEO, David Guzan, filed a civil suit last month alleging he is owed more than $1 million in compensation, including unpaid wages, management fees, ownership interests in companies and damages, according to the Advocate.
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