Bluebird bio, a pioneer in gene therapy, is undergoing a major restructuring, cutting 25% of its workforce as it battles to maintain operations. The biotech firm announced that nearly 100 employees out of its 375 full-time staff will be laid off as part of efforts to reduce cash operating expenses by about 20%.
The cuts will primarily impact research and development (R&D) and general administration roles, allowing the company to focus its resources on commercial activities. CFO James Sterling emphasized that these decisions were made to align with a more focused set of priorities following a detailed review of the company’s needs.
This restructuring follows bluebird’s recent warning about its financial stability. In a delayed annual securities filing, the company expressed “substantial doubt” about its ability to continue as a going concern, highlighting challenges in sustaining operations beyond mid-2025 with its current cash reserves.
Founded in 1992, bluebird bio has dedicated itself to developing potentially curative gene therapies for rare diseases. Despite launching three gene therapies—Lyfgenia, Skysona, and Zynteglo—the company has struggled with profitability, accumulating a deficit of $4.3 billion by the end of 2023.
The commercial uptake of its gene therapies has been slower than expected, with disappointing patient starts leading to a downward revision of its 2024 expectations. The company is now targeting about 40 drug product deliveries per quarter to achieve cash flow break-even by the second half of 2025.
While bluebird aims to double capacity for Lyfgenia in 2026, the success of this plan remains uncertain, especially in light of competition from other products like Vertex and CRISPR Therapeutics’ Casgevy. The company’s efforts to raise additional funds continue, with potential draws from a loan agreement contingent on securing significant financing elsewhere.
Bluebird’s CEO, Andrew Obenshain, and other executives are optimistic about the company’s future, but the financial challenges and market competition present significant hurdles as the company works to stabilize its operations.
