Updated: 2seventy lays off 40% of staff as Nick Leschly steps down as CEO

With an early-stage CAR-T under clinical hold, 2seventy bio is slashing its headcount by 40% and capping spending on some pipeline programs to focus on growing its approved BCMA therapy.

2seventy is eliminating 176 roles as part of the layoffs. Nick Leschly — who’s led the company for nearly 14 years, since before its spinout from bluebird bio — is also planning to step down as CEO, with plans to become chairman once the board finds his successor.

Leschly cited the “macro environment for oncology cell therapy companies and the near-term headwinds we have seen in our own business” as the reason for the restructuring. He added that the search for a new leader for the company is ongoing, and he will remain CEO until a replacement is found.

Chip Baird

The company is expecting a drop in sales of Abecma, its BCMA-targeting CAR-T partnered with Bristol Myers Squibb, for the third quarter of the year. Although 2seventy is optimistic about the treatment’s future, it’s “planning conservatively,” added Chip Baird, who’s switching from CFO to chief operating officer.

On an investor call Tuesday morning, Baird said that the company does expect Abecma to continue to be cash-flow positive, even after the anticipated decline in sales in the third quarter. He expects there to be a “return to growth” in the fourth quarter of this year for Abecma, though total revenue for 2023 may be lower than $470 million, the bottom end of the initial expected range.

“We are reinforcing our competitive real world data, which highlights the consistent and reliable overall profile of Abecma across efficacy, safety and manufacturing in our current and expanding footprint,” Baird added. “Second, we are focused on continuing to expand our manufacturing capacity as we head into 2024, and finally, we are focused on the December 2023 PDUFA date for potential expansion into a third-line label.”

Baird said the potential label expansion will expand the Abecma market in the US from roughly 4,000 patients to about 16,000 patients.

Legend Biotech and its partner, Johnson & Johnson, are also on the move to expand their own BCMA CAR-T therapy, Carvykti. US regulators initially approved Carvykti therapy last year, and the companies are now looking to expand it into the second line of treatment in addition to the fifth line for patients with multiple myeloma.

The biotech is making several adjustments to its in-house R&D plan and operations, streamlining the cost structures and limiting financial commitment to ongoing Phase I programs. One of them, a CD33-targeted CAR-T named SC-DARIC33 being tested in acute myeloid leukemia, was placed under clinical hold in August.

Other partnered programs, it added, are still ongoing, and the pact with China’s JW Therapeutics, in particular, will expand to include more candidates. 2seventy executives said in the investor call on Tuesday that two programs, one in solid tumors and another in autoimmunity, will move to the JW collaboration.

“We believe this will allow us to rapidly advance these programs at a significantly reduced cost,” Baird said.

Taking all of the changes together, the company’s spending will be reduced by approximately $65 million annually and at least $130 million in 2024 and 2025, providing runway until at least 2026.

2seventy shares $TSVT have fallen steadily since it spun out from bluebird bio in late 2021 — taking the oncology pipeline while leaving the rare disease unit behind — but rose 1% to $4.44 in premarket trading. Its market cap currently sits at $221 million.

Editor’s note: This story has been updated with comments from 2seventy during an investor call.

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