As 2seventy Nears Breakeven, CEO Chip Baird Explains How the Team Survived

The short, tumultuous life of 2seventy bio has been marked by events that could bring a biotech down in the best of times, let alone the turbulent markets of the past few years. Layoffs, pipeline reorganizations, a fierce competitor, FDA safety warnings, discontinued clinical trials. You name it, it’s happened to 2seventy. So why is this biotech still here?

2seventy’s CEO Chip Baird paused for a few long seconds, before answering: “That’s a great question.”

But there is an answer, he explained to BioSpace, and after a rough start, 2seventy is finally, painfully, on the path to profitability. He predicted the company will hit that point next year. Investors have peppered him with questions about whether the company will execute an acquisition, do share buybacks, a licensing deal or any other type of business development to bolster growth. All those could be on the table, the CEO said, but first, they have to reach breakeven.

2seventy split from bluebird bio in November 2021 after the latter company secured FDA approval for CAR T therapy Abecma, developed in partnership with Bristol Myers Squibb, as a fourth line option for multiple myeloma that March. 2seventy was intended to oversee the commercialization of Abecma as well as the continued development of a clutch of oncology assets.

Just months in, however, trouble began, and in March 2022 the company let go 6% of staff in an effort to reduce costs. 2seventy also had to contend with the market entry of Johnson & Johnson and Legend Biotech’s CAR T therapy Carvykti after its February 2022 approval in the same indication as Abecma.

Luckily for 2seventy, good news came in the form of positive data for Abecma in the Phase III KarMMa-3 trial, which showed a 51% reduction in the risk of disease progression or death in patients with multiple myeloma. This would eventually underpin an FDA approval as a second-line treatment for this indication, but it would be a long road to get there.

In summer 2023, 2seventy paused a Phase I trial for another CAR T cell therapy after a patient death, and that program would eventually be put on an FDA clinical hold. Then, in September of that year, the company laid off 40% of its employees and CEO Nick Leschly departed as the pipeline was reorganized.

A month later, BMS CEO Chris Boerner admitted that the companies were facing competitive pressure from Carvykti as well as bispecifics, which had been streaming onto the market. All were hampering Abecma’s growth. The therapy would ultimately bring in $358 million in revenue for 2023, far below expectations of at least $470 million and below 2022’s $388 million.

Then, last November, the company suffered yet another setback—perhaps the most ominous: the FDA struck up an inquiry into the risk of secondary cancers that have been detected in some patients following CAR T therapy. The agency delayed the decision date for an application to move Abecma up into earlier rounds of treatment.

So entering 2024, 2seventy had its work cut out—and that’s just when Baird officially took the CEO role in January, stepping up from his role as COO. Any way you slice it, he was up for a tough first year as chief executive, but his directive was clear: make Abeca profitable.

BioSpace

At the same time as Baird’s appointment, 2seventy announced that its pipeline would be sold to Regeneron for just $5 million upfront plus $10 million in milestones. A group of R&D-focused staffers headed over to Regeneron as well. Then in June, a gene editing candidate for hemophilia A was offloaded to Novo Nordisk for $40 million upfront.

What remained of 2seventy coalesced solely around Abecma.

Meanwhile, the FDA quickly resolved its secondary cancer probe, in January announcing that it will require a label update for approved CAR T therapies to warn of the risk. Two months later, the companies behind Abecma and Carvykti were called before an advisory committee to talk about the risk-benefit and overall survival data related to the treatments’ use as second-line options for multiple myeloma. The executives were ultimately convincing, and in April, the FDA approved both therapies’ label expansions.

Abecma is not totally out of the woods yet, however. 2seventy and BMS announced in late September that the KarMMa-9 Phase III trial in patients with newly diagnosed multiple myeloma who have suboptimal response to autologous stem cell transplant would be discontinued as newer treatment options had affected the pace of enrollment.

After his initial hesitation to BioSpace’s question about how 2seventy bio has survived this tumultous short history, Baird gave his answer: “I’m going to say a lot of it comes down to the culture and the people who work here, and just the resilience that the people have. There’s a tremendous affinity people have for the company, but [also] for each other.” Baird said that he hears from former 2seventy bio employees—many of whom have moved on to roles at Novo Nordisk or Regeneron or still work in the same Cambridge building—that they miss the culture. The remaining 2seventy team is small, with a current headcount of about 65.

One of the reasons for this positive culture, Baird contends, is consistent transparency from the company’s leadership. Throughout the many ups and downs, Baird said, 2seventy executives have communicated the knowns and unknowns in a way that has kept the team unified on its mission. “There’s no Oz behind the curtain making our decisions,” he said. “We’re going to see you in the hallways and at the lunchroom, so having that accessibility and being as transparent as you can about what you’re doing, I think that goes a long way.”

It turns out that real estate was a key reason for the Regeneron deal in the first place. When that news broke, the relatively low disclosed deal value of $15 million was a head scratcher. “It was modest,” Baird admits.

A year ago, 2seventy’s executives realized they couldn’t continue effectively supporting their end of the long-running Regeneron deal. Baird calls 2seventy’s original path “bifurcated,” or a “barbell distribution,” with the company marketing Abecma while also prepping a handful of assets to enter clinic trials. The hope was that cash flow from Abecma would fund the latter, and that the company’s big partners, Regeneron and BMS, could also provide support.

“But the reality . . . was that the costs were even higher than we had initially drawn up,” Baird said. The timelines for achieving critical milestones for the research programs were just slow, he added, and the overall industry was struggling with the high cost of capital, particularly mid-cap cell therapy biotechs. “It became increasingly clear to us that serial financing of that was just going to be really hard.”

And so, according to Baird, 2seventy essentially told Regeneron: “We don’t know that we can continue to hang in this collaboration and support our side of the funding.”

Luckily, Regeneron was more than happy to buy out 2seventy’s clinical assets, which saved about $100 million a year, according to Baird. Importantly, Regeneron also took on the physical footprint of the R&D program, relieving 2seventy of two-thirds of its real estate in Cambridge, which at the time was difficult to offload, Baird explained.

“Regeneron, they’re just in a very different place,” he told BioSpace. “They can have an investment horizon that is a 10-year horizon.”

2seventy kept a commercial stake in the deal, meaning there will be some undisclosed milestones down the line, but otherwise the teams are separate despite the occasional elevator run-in, shared lunch or group outing to a holiday market at Christmastime, Baird said.

With the second-line approval in hand for Abecma, Baird said revenue is trending upward again with 30% growth quarter-on-quarter. He expects to reach profitability as soon as next year and does not expect any more layoffs. “I’m optimistic about our future,” he said. “The team is lean and where it needs to be.”

But Abecma has effectively hit its ceiling in terms of label expansion, with 2seventy’s “tricky decision” to drop the KarMMa-9 trial for newly diagnosed patients, Baird said. The company had seen deep, durable responses in the population during an earlier study, so a Phase III was a natural step, and the team launched that trial with high confidence in taking it all the way to a label expansion, he continued. But in the ensuing time between planning the study and enrolling, the treatment landscape changed—patients had more options.

“We can only celebrate that—like, that’s good news,” Baird said. But it also means the ultimate market for Abecma has shrunk, and 2seventy will not be doing any additional formal studies of the CAR T therapy in multiple myeloma, even as BMS continues to study Abecma as a third-line treatment in the disease. According to Baird, 2seventy’s plan is to focus on reaching as many as possible of the 16,000 or so people covered by the therapy’s current label. “I think that’s going to keep us busy for a period of time,” he said.

Baird added that while many cell therapy–focused companies have redirected to autoimmune or moved into solid tumors, 2seventy is unlikely to follow that path for Abecma. “Our focus, and we’ve said, is to get to cash flow breakeven as quickly as we can, so we don’t want to be distracted by or bolt on other things.”

But investors are restless, demanding to know exactly what 2seventy might do to boost growth thereafter. “The glib answer is, ‘Well, ask us when we get there,’” Baird said.

Options could include building back a pipeline, buying back shares or offering shareholders a dividend. And Baird hinted at the most exciting of strategic options, suggesting an M&A deal to a larger pharma company is not off the table.

“There’s not many biotechs that actually get to achieve cash flow breakeven, and even with some of the turbulence we’ve had, we’re actually tantalizingly close to that moment.”