The layoffs will not spare Generation’s R&D team, which will initially be retained while the biotech completes its strategic review but will eventually be let go.
Generation Bio will shed 90% of its workforce amid a cash crunch that could render the biotech unable to support clinical development for its lipid nanoparticle platform.
This strategic restructuring is set to happen in phases from mid-August through the end of October, according to Generation’s second-quarter earnings release on Wednesday. The company will initially retain its core R&D unit while it reviews its strategic alternatives—though this team will eventually be let go.
At the end of 2024, Generation had 115 full-time employees, as per its annual report. The company then terminated 20% in January this year, potentially leaving it with 92 staff. These latest layoffs, therefore, could affect some 83 people.
With TD Cowen enlisted as an advisor, Generation is looking at strategic alternatives such as an acquisition, a merger or a sale of assets. The company is making no promises that its review will lead to any transaction. Generation has also not set a timeline for its strategic review.
Launched in January 2018 with support from the venture capital firm Atlas Venture, Generation is focused on addressing T cell–driven autoimmune conditions with its cell-targeted lipid nanoparticle (ctLNP) platform.
According to the biotech’s website, this technology provides “selective access” to T cells and allows the precise delivery of siRNA therapies to modulate these immune players. More broadly, Generation’s ctLNP platform can enable the targeted delivery of genetic therapy cargoes to a wide range of cell types. Unlike other lipid nanoparticle–based systems, ctLNP operates in a “stealth” mode that helps minimize off-target effects.
Early findings for this ctLNP technology so far seem to be encouraging. In its Q2 report on Wednesday, Generation announced that the platform was able to selectively deliver siRNA payloads to T cells in non-human primates. This led to the successful and significant knockdown of a specific target protein in these cells over three weeks.
Despite this preclinical promise, however, its path to the clinic and to the market is imperiled by cash constraints. “Our program data are early and we recognize the significant time and investment required to reach proof-of-concept in patients,” CEO Geoff McDonough said in a prepared statement on Wednesday, additionally pointing to the “uncertainty of extending our current cash runway.” Generation’s strategic restructuring will help “maximize the value of our assets,” he added.
With no products on the market, and with the ctLNP platform still in its very early stages, Generation is operating in the red, with $20.9 million in net loss in the second quarter. As of June 30, the company had $185.2 million in cash, cash equivalents and marketable securities, enough to keep it going “for the foreseeable future,” as per Wednesday’s release.
