2seventy’s Bold Restructuring Move: CEO Out as Company Sheds 40% of Workforce

2seventy Bio’s Bold Move: CEO Steps Down as Company Slashes Workforce and Refocuses on Profitability

In a dramatic shift, 2seventy Bio has initiated a comprehensive strategic restructuring plan to streamline its operations and research and development model. The biotech firm, known for its immuno-oncology focus, is set to advance fewer pipeline programs in a bid to achieve substantial cost savings and pave the way for long-term growth.

As part of this sweeping reorganization, 2seventy Bio will bid farewell to 176 employees across various departments, representing a substantial 40% of its workforce. While this will result in a one-time expenditure of $9 million in severance and restructuring costs, it’s expected to yield annualized savings of at least $65 million.

Between 2024 and 2025, this strategic realignment is forecasted to generate a whopping $130 million in savings. The company will also optimize its facilities and trim external expenses by 2025 to drive further cost reductions.

CEO Nick Leschly cited the “challenging and unpredictable macro environment” as the driving force behind this strategic overhaul. He acknowledged delays in later-stage programs and the evolving dynamics of their Abecma gene therapy as factors prompting these necessary changes.

In a significant leadership shift, Leschly will step down as CEO and transition to the role of Chairman of the Board of Directors once a successor is identified, according to the company’s announcement.

Furthermore, Chip Baird, the current CFO, will now serve as the company’s COO, expanding his responsibilities to encompass finance, corporate development, portfolio and program management, investor relations, and corporate communications.

2seventy Bio’s outlook for its multiple myeloma CAR T cell-based gene therapy, Abecma, will become more conservative. While the company maintains confidence in its profitability this year and its significant contribution in the years ahead, it anticipates lower full-year 2023 U.S. revenue for Abecma than initially projected.

Previously, the company had forecasted U.S. sales in the range of $470 million to $570 million, to be shared equally with partner Bristol Myers Squibb.

Abecma also awaits an FDA target action date on December 13, 2023, which could potentially expand its label to include relapsed/refractory multiple myeloma patients who have been exposed to at least three drug classes. This, coupled with planned studies in other patient groups, promises to bolster Abecma’s commercial potential, as announced by 2seventy Bio.

The company will also implement cost-control measures and adjust its R&D plans for in-house candidates. While bbT369, a hopeful for B cell non-Hodgkin lymphoma, will proceed with its Phase I study, further investment beyond Phase I will be carefully assessed. Initial data for this investigational therapy is eagerly awaited next year.

Meanwhile, 2seventy Bio intends to limit its financial commitment to the ongoing Phase I trial of its acute myeloid leukemia candidate, SC-DARIC-33. This candidate faced a clinical hold from the FDA in June 2023, and the company is actively collaborating with regulators to resolve this issue.

Notably, all of 2seventy Bio’s partnered pipeline assets will continue to advance, with some even expanding to include new programs, according to the company’s announcement.

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