Bluebird Bio Cuts Spending, Amends BMS Deal to Respond to COVID-19 Impact
May 11, 2020
Rare Daily Staff
Bluebird Bio said that its collaboration partner BMS will buy out its obligations to pay Bluebird future ex-U.S. milestone and royalty payments for ide-cel and bb21217, the companies’ second BCMA-directed CAR T immunotherapy, for a one-time upfront payment of $200 million.
The companies will continue to share equally profits and losses in the United States.
The decision comes as the company said it is undertaking a comprehensive business review because of the COVID-19 pandemic’s impact on regulatory timelines as it seeks to ensure its ability to “achieve its 2022 vision with a path towards financial sustainability.”
The company said it has taken steps to reduce spending on selling, general, and administrative expenses and other cost-reduction measures. It has prioritized investment in R&D. Nick Leschly, Bluebird chief, will decline nearly 100 percent of his salary for the next 12 months. Similarly, additional members of the Bluebird Bio senior leadership team and all members of the company’s board of directors will forgo 20 percent of their salaries or board cash retainers for the next 12 months. All will receive a grant of restricted stock units equal to 80 percent of the value of the released cash compensation, which will vest over one year.
In total, the changes are expected to result in more than $500 million of net cash savings through 2022 compared to the prior long-range plan. As a result, Bluebird Bio expects cash, cash equivalents, and marketable securities of $1.02 billion as of March 31, 2020, together with projected revenue generated under collaborative arrangements, projected sales of products and cash inflows associated with the amended agreements with BMS, to fund the revised operating plan into 2022.
“This prioritization effort and operational review has led to significant efficiencies and spend reduction across our company and will extend our cash runway into 2022,” said Leschly. “The fundamentals of our business remain sound and our newly revised operating plan enables us to execute on the 2022 vision while putting us on a path towards financial sustainability.”
Bluebird said the amendments to the existing co-promotion/co-development agreement with BMS will allow the companies to focus their efforts on efficient commercialization of their lead experimental B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy, currently in review with the FDA.
Bluebird Bio is currently in the process of building out and qualifying its wholly owned manufacturing facility in Durham, North Carolina to produce lentiviral vector (LVV) to support the U.S. commercial market for ide-cel and for Bluebird Bio’s pipeline. Over time, BMS will assume responsibility for manufacturing of LVV outside the United States.
Sign up for updates straight to your inbox.