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(Reuters) -2seventy bio said on Tuesday it plans to lay off about 40% of its workforce to cut costs and focus on the biotech company’s cancer cell therapy Abecma, sending the company’s shares down in premarket trading will rise more than 8%.
The company added that CEO Nick Leschly will step down and transition to the role of chairman. Leschly previously served as CEO of Bluebird Bio for 11 years, but changed roles after the gene therapy maker’s oncology portfolio was spun off from it as 2seventy.
2seventy said Tuesday that by eliminating 176 positions it will save about $130 million in 2024-2025, which will be used to increase focus on Abecma.
Abecma competes with Carvykti, a cell therapy from Johnson & Johnson (NYSE:) and Legend Biotech, as a fifth-line treatment for patients with multiple myeloma – a form of blood cancer.
The two therapies work by collecting a type of white blood cell from a patient, genetically modifying them to fight cancer, and then infusing them back into the patient.
2seventy bio and partner Bristol Myers (NYSE:) Squibb split the profits equally from Abecma, which posted US revenues of $115 million in the second quarter.
However, the original group of eligible multiple myeloma patients who needed the therapy has largely been addressed, and now demand will only be driven by additional patients, 2seventy Chief Financial Officer William Baird said last month during a conference call for investors.
The company will now focus on a different type of multiple myeloma patients, for which it expects approval from the US Food and Drug Administration in mid-December.
2seventy said Tuesday it expects a decline in Abecma sales in the third quarter and that U.S. sales for the therapy in 2023 could be lower than the $470-$570 million it previously forecast.