(Reuters) -2seventy bio said on Tuesday it plans to lay off about 40% of its workforce to lower costs and focus on the biotech firm's cancer cell therapy Abecma, lifting the company's shares more than 8% in premarket trade.
The company added that CEO Nick Leschly will step down and transition to the role of chairman. Leschly was earlier the CEO of bluebird bio for 11 years, but changed role after the gene therapy maker's oncology portfolio was spun off from it as 2seventy.
2seventy said on Tuesday that by eliminating 176 roles it will save about $130 million in 2024-25 that will be used to increase its focus on Abecma.
Abecma competes with Carvykti, a cell therapy from Johnson & Johnson (NYSE:JNJ) and Legend Biotech, as a fifth line treatment for patients with multiple myeloma - a type of blood cancer.
The two therapies work by collecting a type of white blood cells from a patient, genetically modifying them to fight a cancer and then infusing back into a patient.
2seventy bio and partner Bristol Myers (NYSE:BMY) Squibb equally split profits from Abecma, which recorded $115 mln in U.S. sales in the second quarter.
However, the original group of eligible multiple myeloma patients who needed the therapy have largely been addressed, and now the demand will only be driven by additional patients, 2seventy Chief Financial Officer William Baird had said during an investor conference call last month.
The company will now focus on another type of multiple myeloma patients, for which it expects approval from the U.S. Food and Drug Administration in mid-December.
2seventy said on Tuesday it expects a decline in sales of Abecma in the third quarter and U.S. revenue for the therapy in 2023 could be lower than the $470-$570 million range it previously projected.