The job cuts, which affect a variety of functions and levels, are expected to slow its cash burn rate and leave the company with sufficient funds on hand to operate until mid-2023.
Zymergen has announced that it is letting go around 220 employees after deciding to restructure the company and discontinue its consumer care and electronics film programs, among others.
The job cuts, which affect a variety of functions and levels, are expected to slow its cash burn rate and leave the company with sufficient funds on hand to operate until mid-2023. In an announcement on its preliminary third quarter financial results, Zymergen said that cutting its direct-to-consumer initiatives after a portfolio review revealed that they were prohibitive and costly.
For the third quarter to September 30, the company posted a net loss of $98.2 million, with total revenue only logging at $4.1 million, all of which are due to collaborations and research and development service agreements. Operating expenses for the period were at $99.3 million. The total cost of restructuring the company is $21.2 million, and there will be a reversal of accrued performance bonuses amounting to around $9.4 million.
As a result, several of Zymergen’s programs will be discontinued, such as consumer care, including insect repellent ZYM0201, and electronics films, including Hyaline. Its ZYM0101 film product being developed with Sumitomo Chemical will remain.
On the other hand, two of Zymergen’s healthcare-focused programs have been elevated due to their earning potential. One is for the development of key enzymes to create vaccines, while the other involves drug discovery. The company will work on previously existing projects and leverage its core capabilities to explore new ones for both initiatives.
Its foray into agriculture, especially the flagship project on nitrogen fixation, will continue. Zymergen said it remains interested in similar programs for future consideration.
“We have made significant progress on a number of the objectives we laid out in our August update, including a review and focusing of our portfolio, strengthening our Commercial organization, our product development and launch process, and extending our cash runway. We are pleased with our progress and remain focused on our strategy of pursuing continuous launches of breakthrough products,” said Jay Flatley, the acting chief executive at Zymergen, in a statement.
The company launched an initial public offering in April this year and managed to raise $500 million. However, shares in the company dropped 68% just three months after the event, ending with its then-CEO and co-founder Josh Hoffman stepping down from his post. Flatley has assumed the role since. Back then, Zymergen already started expressing concerns about its commercial product pipeline and warned that it would be unable to meet time and revenue expectations for the year and well into 2022.
