Flagship’s Kaleido Biosciences shuts down, as more biotechs lay off staff

Financial climate makes it more difficult for firms to secure funding and go public.

Chemicals sit inside a refrigerator at a lab in Cambridge.Adam Glanzman/Photographer: Adam Glanzman/Bloo

A few months after Flagship Pioneering spinout Kaleido Biosciences slashed 30 percent of its workforce, the company said it is shutting down operations.

According to a filing with the Securities and Exchange Commission on Friday, all remaining employees at the Lexington-based company have been terminated. Kaleido said it employed 76 people at the end of 2021. A spokesperson for Kaleido declined to comment further.

Kaleido’s closure comes amid a growing number of biotechs that are stepping on the brakes, as the financial climate is making it more difficult to secure funding and go public. Layoffs at 10 local companies this year, including Biogen, Bluebird Bio, and Akebia Therapeutics, are estimated to affect about 750 people.

Founded in 2015, Kaleido was a clinical-stage biotech company trying to harness bacteria, viruses, and fungi that make up the human microbiome to treat conditions ranging from allergies and diabetes to cancer and Parkinson’s disease. The company raised at least $165 million in venture capital before completing an IPO in 2019.

Kaleido warned investors in November that it only had enough cash to get through the second quarter of 2022. In January, around the same time Insider reported a round of layoffs, Kaleido halted its planned Phase 2 clinical study on chronic obstructive pulmonary disease, or COPD, according to a regulatory filing.

Before Kaleido’s board of directors voted to shut down the company, it sought the advice of professional advisers, including an investment banker, to try to turn things around. The company said in its filing this week that “the strategic process did not result in the identification of any viable transactions.”

Here’s a roundup of other Massachusetts biotech companies that are shrinking their workforces, with a brief description of each.

April

Akebia Therapeutics

Cambridge

Akebia slashed its workforce by 42 percent after the Food and Drug Administration rejected its application for an anemia drug, according to a filing with regulators on April 4.

The company employed 426 people at the end of 2021, so the layoff could affect about 180 people.

Bluebird Bio

Cambridge

Bluebird Bio said April 5 that it will lay off 30 percent of its workforce as part of a plan to extend its cash runway into the first half of 2023.

The publicly traded gene-therapy company employed 518 people at the end of January 2022, according to its annual report. When Bluebird Bio split into two publicly traded companies last year, it spun out 2seventy Bio, a biotech focused on cancer cell therapies.

March

Biogen

Cambridge

As part of a $500 million restructuring plan following the controversial debut of its drug for Alzheimer’s disease, Biogen is laying off employees, the company confirmed in March. Biogen has not disclosed how many people will be affected.

Endpoints News reported that Biogen already let 100 people go. STAT News reported the total number of cuts at Biogen this year could reach 1,000.

The company had about 9,600 employees globally at the end of 2021, including about 2,800 in Massachusetts.

Epizyme

Cambridge

On March 1, Epizyme said it planned to cut 12 percent of its staff to reduce operating expenses. That brings its headcount of full- and part-time employees from 250 to 215, the company said in its annual report. The commercial-stage company is working on cancer therapies.

2seventy Bio

Cambridge

Recent Bluebird spinout 2seventy Bio announced March 22 that it would reduce its spending this year from between $220 million and $250 million to between $190 million and $220 million. A spokesperson told the Boston Business Journal that the decision involved laying off 6 percent of its workforce.

According to a regulatory filing, the company employed 437 people at the end of March, so the reduction affected about 26 people.

Merck & Co. / Acceleron Pharma

Cambridge

Less than five months after completing its $11.5 billion acquisition of Acceleron, Merck said it would lay off 143 employees from the Cambridge company this year.

February

Gemini Therapeutics

“Remote-first company” (formerly based in Cambridge)

Gemini said Feb. 28 that it planned to lay off up to 24 people, or 80 percent of its workforce, in the first half of the year. It’s the second restructuring to hit the precision medicine firm since it merged with a special purpose acquisition company and raised about $216 million in February 2021.

Yumanity Therapeutics

Boston

The firm, which is focused on neurodegenerative diseases, said Feb. 17 that it would cut about 60 percent of its workforce during the first quarter of the year to preserve capital. At the end of 2021, Yumanity had 40 employees, according to its annual report.

The company is now looking for a buyer.