Avrobio stops programs, halves head count and searches for exit

Avrobio is tearing up its plans. Rather than push ahead with work on a trio of gene therapies, the biotech has decided to stop development, lay off half its staff and seek buyers interested in its remaining assets.

Massachusetts-based Avrobio bought itself time in June by closing the sale of a cystinosis hematopoietic stem cell gene therapy program to Novartis for $87.5 million. The deal extended the biotech’s cash runway from the first to the fourth quarter of next year but, with a planned phase 2/3 trial of a Gaucher disease candidate having a completion date of 2027, failed to quench its longer-term cash needs. 

Avrobio, which has traded below $1 for much of the past year, has decided cashing out may be its best option. The biotech has begun exploring strategic alternatives and is hunkering down to preserve cash as it assesses potential deals.

Further development of Avrobio’s Gaucher, Hunter syndrome and Pompe disease candidates is on hold, a decision the biotech said was unrelated to safety or medical issues or negative regulatory feedback. The only work now taking place relates to halting the programs, the pursuit of strategic alternatives and the provision of previously agreed services to Novartis.

The narrowing of Avrobio’s focus will cost people their jobs. Having ended last year with 78 full-time employees, the biotech is reducing its workforce by around 50% “across different areas and functions,” the company said in a Securities and Exchange Commission filing.

Reducing spending will allow Avrobio to preserve more of what may prove to be its most attractive asset: cash. The biotech ended March with $72.3 million in the bank and subsequently received $87.5 million from Novartis. Another cash-strapped biotech could boost its bank balance by giving stock to merge with Avrobio, securing itself a Nasdaq listing in the process if it is privately traded today.

Avrobio also has three gene therapies, two of which are in the clinic, but they are yet to generate much excitement outside of the company. Investors place little value on the assets, and Novartis only picked up the cystinosis prospect when it sat down to make a deal with Avrobio.