Avrobio, a Massachusetts-based biotech company, halts gene therapy development, initiates layoffs, and seeks strategic alternatives
Avrobio, a Massachusetts-based biotech company, has recently made a significant decision to halt the development of three gene therapies. In an effort to preserve cash and explore strategic alternatives, the company has also announced a workforce reduction of approximately 50%. This article highlights Avrobio's layoff announcement and provides insights into the factors leading to this decision.
Avrobio, which has faced financial challenges and traded below $1 for a significant portion of the past year, has chosen to explore strategic alternatives. The company aims to secure buyers interested in its remaining assets and has initiated discussions to assess potential deals. By exploring these options, Avrobio hopes to optimize its resources and address its long-term cash needs.
Avrobio's decision to halt the development of its Gaucher disease, Hunter syndrome, and Pompe disease candidates is not due to safety concerns, medical issues, or negative regulatory feedback. Instead, the company aims to prioritize cash preservation and focus on strategic alternatives. Presently, the only ongoing activities at Avrobio pertain to winding down the programs, pursuing strategic alternatives, and fulfilling previously agreed-upon services for Novartis.
As part of its cost-saving measures, Avrobio is reducing its workforce by approximately 50% across various areas and functions. With 78 full-time employees at the end of the previous year, the biotech company is making necessary adjustments to align its resources with its new strategic direction.
Avrobio's decision to reduce spending and streamline operations is driven by the need to preserve cash. The company had $72.3 million in its bank account as of March and recently received $87.5 million from the sale of its cystinosis hematopoietic stem cell gene therapy program to Novartis. By prioritizing cash preservation, Avrobio aims to enhance its financial stability and potentially attract potential partners or buyers interested in merging or investing in the company.
Avrobio possesses three gene therapies, two of which are currently in the clinical development phase. However, these therapies have yet to generate significant enthusiasm outside the company. Investors have placed relatively little value on these assets, as evident from the company's stock performance. Novartis, for instance, acquired the cystinosis prospect only as part of its agreement with Avrobio.
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