Bluebird Bio Cuts Expenses and Its Workforce to Navigate Cash Crunch

(Bloomberg) -- Bluebird Bio Inc. plans to cut 30% of its workforce as part of an effort to preserve cash and keep the company afloat while it awaits its first U.S. gene-therapy approvals.

The cuts will fund the company into the first half of next year, Cambridge, Massachusetts-based Bluebird said in a statement. By then, the company anticipates that U.S. regulators will clear two of its gene therapies, one for a rare metabolic ailment and another for the blood disorder beta thalessemia. Bluebird had 518 employees as of Jan. 31, according to regulatory filings.

Bluebird last month said there was substantial doubt about its ability to fund its operations in the next year. Since spinning off its cancer business in November, it has faced “unanticipated hurdles,” including a partial pause in a key clinical trial and a wider malaise in biotech stocks, Chief Executive Officer Andrew Obenshain said. That's taken some traditional financing options off the table in the near term, he said.

The restructuring was the latest blow to the once-vaunted company, which has seen its stock price fall to $5.19 as of Tuesday morning in New York, from a high of more than $150 in early 2018.

“Being one of the first in gene therapy means we have also faced a uniquely challenging environment navigating the precedent-setting nature of being a pioneer in this field introducing novel therapies with the expectation of lifelong benefit,” Obenshain said Tuesday on a conference call with analysts and investors.

Bluebird will narrow its focus to the two gene therapies under Food and Drug Administration review and another for sickle cell disease that the company expects to submit for approval early next year. It will reduce emphasis on work in other areas, such as developing less harsh treatments to prepare people to receive gene therapy.

“We need to focus our resources on our near-term critical milestones and allow the gene therapy field to carry these efforts forward,” said Chief Financial Officer Jason Cole.

Bluebird said it will continue to explore financing options, including private and public, as well as monetizing priority review vouchers the company could receive if it's gene therapies are approved.