2Seventy Bio, a Cambridge biotech developing cancer drugs, said Tuesday it will lay off about 40 percent of its workforce, or 176 employees, becoming the latest Massachusetts drug company to slash its staff as the business sector faces hard times.
2Seventy’s chief executive, Nick Leschly, who led the Somerville gene therapy company Bluebird Bio for 11 years before it spun off 2Seventy in 2021, also said he plans to step down as chief executive and become chairman of the board of directors.
He said the layoffs and restructuring will help the publicly traded firm save at least $130 million over the next two years and extend its cash into at least 2026. 2Seventy remains committed to developing cancer treatments, including forms of immunotherapy called CAR T-cell therapies, but will narrow its drug pipeline, he said.
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“The macro environment for oncology cell therapy companies and the near-term headwinds we have seen in our own business have led us to examine how we pursue our mission,” Leschly said. “Today we are taking hard but necessary steps to streamline our team and optimize our R & D approach and cost structure.”
2Seventy had high hopes for sales of a drug it shares with Bristol Myers Squibb called Abecma to treat multiple myeloma, a blood cancer. The Food and Drug Administration has approved it for patients who failed to respond to at least four prior cancer treatments, but the business partners are seeking its approval as an earlier treatment.
But the drug faces competition from Johnson & Johnson and Legend Biotech, which have a rival drug called Carvykti. On Tuesday, 2Seventy said it expects Abecma sales to decline in the third quarter and US revenue for the treatment for the year could be lower than the $470 million to $570 million it previously projected.
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The firm has suffered other recent setbacks.
Last month, the FDA put an early-phase trial of 2Seventy’s experimental CAR T-cell therapy for acute myeloid leukemia on hold following a patient’s death. 2Seventy had already paused the study in June after a patient at Seattle Children’s Hospital died. 2Seventy, which has investigated the cause of the death with the hospital, said Tuesday it is working with the FDA to try to resume the study but added the firm “plans to limit financial commitment” to the trial.
The biotech sector, a pillar of Massachusetts’ economy, has been roiled by layoffs this year after the industry had banner years in 2020 and 2021.
Early in the pandemic, biopharmaceutical firms were launched and expanded rapidly amid investor enthusiasm in companies like Moderna, the breakout biotech that developed one of the messenger RNA vaccines to prevent COVID-19.
However, there have been repeated rounds of layoffs in recent months and several notable setbacks in the development or approval of drugs. Venture capital investing has declined, and the window for initial public offerings has all but closed.
Over the summer, biotechs Karyopharm in Newton, Celsius Therapeutics in Cambridge, Homology Medicines in Bedford, Intergalactic Therapeutics in Cambridge, ImmuneID in Boston, and Infinity Pharmaceuticals in Cambridge, announced layoffs, sidelining hundreds of workers in the state.
Biogen, long an anchor in the Massachusetts drug sector, said in July it was laying off about 1,000 jobs worldwide, to save $700 million in net operating expenses by 2025, though it wasn’t clear how many of those cuts would be in Massachusetts. Biogen had already slashed hundreds of jobs from its Massachusetts workforce in response to a shrinking market for its expensive multiple sclerosis drugs and the flop of a controversial Alzheimer’s medicine, Aduhelm.
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More recently, Sage Therapeutics of Cambridge said it would eliminate 275 jobs, while Waltham’s Apellis Pharmaceuticals said it would pare 225 from its payroll.
MassBio, a trade group for the biotech industry, issued an “industry snapshot” last week that said Massachusetts continued to expand its biopharma workforce in research labs and manufacturing plants last year. Overall employment in the sector increased 6.9 percent to about 114,000 in 2022, compared to nearly 107,000 the prior year.
However, the snapshot didn’t include layoffs that have engulfed the sector this year, because job totals were reported as of Dec. 31.
Leschly said he plans to step down as chief executive after the board finds a successor. The firm plans to appoint him as board chairman.
Known for wearing colorful running shoes at work, Leschly gave this explanation for 2Seventy’s unusual name when the company was spun out of Bluebird Bio in 2021: “Two hundred seventy miles per hour is the maximum speed of human thought,” or how fast neural signals travel in the brain.
“The name 2Seventy was selected to signify this speed and our team’s translation of thought to action” in the treatment of cancer, he said.
Jonathan Saltzman can be reached at jonathan.saltzman@globe.com.