Bluebird Bio, a gene-therapy biotechnology company, has announced plans to cut down its budget and workforce for staying in business in the ensuing years.
Bluebird was recognized as one of the 13 biotech firms encountering a difficult financial future. All these 13 businesses have recently warned investors in filings with the SEC (Securities and Exchange Commission) of doubts about their ability to survive in business for the next 12 months.
According to Bluebird, it is planning to cut off its workforce by 30% for shedding costs to around $160 million over two years. The company staffed 518 people as of January 31st.
As per sources, Bluebird closed last year with cash and equivalents of around $442 million and recorded a net loss of around $563 million in 2021.
The firm is also downgrading its research focus and estimating a cash burn of below $340 million in 2022.
In its SEC filing, the firm said that Bluebird has planned to save money by rotating off its cancer research programs into an isolated company known as 2Seventy Bio, moving to Somerville from Cambridge, and shutting down its operations in Europe.
Notably, such events are often a way companies execute cost-saving measures like layoffs, debt financings, and sales of assets.
In the past year, the stock price of Bluebird has fallen by 70%, with the firm being valued at $370 million. Recently, the shares also traded down to 1%. Now, many of Bluebird's prospects will depend on approval decisions by the FDA (Food and Drug Administration) for its novel gene therapies.
The FDA is expected to announce a decision for Bluebird's beta-thalassemia treatment by August 19 and for a gene therapy treating a metabolic disorder termed cerebral adrenoleukodystrophy by September 16.
Source Credit - https://www.businessinsider.com/bluebird-bio-layoffs-reduces-cash-burn-rate-into-2023-2022-4?IR=T