NEW YORK – Bluebird Bio on Tuesday said it is implementing a restructuring plan, including layoffs, to enable its quarterly cash flow to break even in the second half of next year.
Somerville, Massachusetts-based Bluebird said it expects the restructuring effort to result in a 20 percent year-over-year reduction in cash operating expenses by Q3 2025. This breakeven target assumes that the company scales to roughly 40 drug product deliveries each quarter and obtains additional cash resources.
Bluebird has struggled with slow uptake of its gene therapy products, as 41 new patients have received one of its gene therapies since the start of the year. However, it expects this to accelerate, with about 40 new patients to begin treatment each quarter, beginning in the fourth quarter of this year.
As part of the restructuring plan, Bluebird will cut about 25 percent of its workforce.
The company will also "further sharpen" its focus on the ongoing commercial launches of Lyfgenia (lovotibeglogene autotemcel), Zynteglo (betibeglogene autotemcel), and Skysona (elivaldogene autotemcel), its gene therapies for sickle cell disease, transfusion-dependent beta-thalassemia, and cerebral adrenoleukodystrophy, respectively.
"Today we are taking decisive action designed to optimize our cost structure and position the company to attract the additional capital required to unlock the significant commercial opportunity before us," Bluebird CEO Andrew Obenshain said in a statement. "The decision to reduce our workforce in support of a more focused set of priorities was made following a detailed review of the needs and capabilities of our organization, and we are grateful to every Bluebird who has helped realize our founding vision of making gene therapy a reality for patients and families impacted by severe genetic diseases."
Bluebird expects to incur roughly $3.7 million in cash expenditures for severance and employee termination-related costs and between $300,000 and $500,000 in stock-based compensation expenses, which will be paid through year-end, the company said in a filing submitted to the US Securities and Exchange Commission.
Bluebird in August reported $16.1 million in revenue for its second quarter, up from $6.9 million in the year-ago quarter, primarily driven by revenue from Zynteglo. The company reported $193 million in cash, cash equivalents, and restricted cash balance as of June 30, which it said would fund operations into Q2 2025.
This restructuring announcement follows other efforts from the company to improve its finances. In March, the company entered into a $175 million loan facility with Hercules Capital, which it said in August it had renegotiated to be eligible to receive two future tranches of $50 million in total, contingent on certain milestones. In December, Bluebird entered into an accounts receivable factoring agreement with Alterna Capital Solutions to provide it with access to $100 million on a revolving basis, and announced plans to raise $150 million through a public offering of its common stock.