2seventy bio's honeymoon phase is over as job cuts hit 6% of staff

Slimmed-down 2seventy bio is getting even slimmer, with 6% of its workforce heading out the door less than five months after formally spinning off from bluebird.

The layoffs were confirmed in an email to Fierce Biotech Wednesday by a spokesperson after the company announced Tuesday that it had “taken important steps to reduce overhead costs and streamline our operating model.”

The cost-saving measures were reported in the company’s fourth-quarter earnings report, which estimated the cuts would trim annual cash spend by roughly $30 million. A company spokesperson confirmed 6% of existing staff would be cut but said most of the savings were coming from “external spend and increased discipline around hiring.”

The downsizing marks the end of 2seventy bio’s honeymoon period after formally spinning off from bluebird bio in November 2021 with the prized FDA-approved CAR-T treatment Abecma. CEO Nick Leschly acknowledged in a February interview that it’s difficult to seamlessly break off. 

“When you do a split like this, you don’t stick the landing perfectly,” he said. “So we’re also trying to make sure we have the right people in the right seats with the right skill sets and the right, sort of burn rate if you’d call it that, to make sure that we have a runway to be successful across the board.” 

The prescient acknowledgement also came as Leschly was bullish on the company’s aspirations, giving a glimpse into the startup-like atmosphere that’s marked 2seventy’s early days. 

“I hope in five years we have something that’s better than Abecma,” he said. 

But as Leschly well knows—after leading bluebird bio for more than 11 years—the most important asset is money. Abecma, which was developed in partnership with Celgene (later acquired by Bristol Myers Squibb), is expected to make as much as $300 million in 2022. The drug was approved in early 2021 to treat multiple myeloma in patients who had already tried four lines of treatment.

Last week, the company closed a $170 million private financing spearheaded by a number of investors including Leschly himself. Heading into 2022, the company had more than $360 million in cash and assets, enough to carry it into 2025.

But 2seventy’s investment in the back end of its pipeline has been substantial, with more than $260 million spent on R&D in 2021. In February, Leschly was confident that by splitting off, the company could focus on both expanding Abecma and furthering the pipeline.

“We have this amazing product and we have this amazing, now, science that we believe in,” he said. “How do you just lean into that and do everything you can to make that come to fruition?”

Since hopping on Wall Street, the company has seen shares slowly decline, bottoming out early last week. But the stock has rebounded since, up more than 21% in the last five days from $14.09 per share to more than $17.