Key Takeaways
- Sarepta Therapeutics is laying off 493 employees, including 80 in Franklin County, as part of restructuring efforts.
- The layoffs follow an FDA hold on the company’s gene therapy trials related to Duchenne muscular dystrophy, amidst safety concerns.
- The company anticipates over $100 million in cost savings by 2025, despite incurring severance costs of $32 million to $37 million.
Sarepta Therapeutics Plans Major Layoffs Amid FDA Scrutiny
Sarepta Therapeutics, a biotechnology company, has announced it will lay off nearly 500 employees, with 80 of those positions in Franklin County. The workforce reduction affects a total of 493 employees across various roles, including manager positions, research associates, and senior scientists at the company’s Easton facility.
The layoffs are part of a broader restructuring initiative intended to reduce operating costs. According to a letter to Columbus Mayor Andrew Ginther, this notification was made in compliance with the federal Worker Adjustment and Retraining Notification Act (WARN). Affected employees will not be able to exercise bumping rights and are not part of a union, complicating the transition for those laid off.
While the WARN letter did not provide specific reasons for the layoffs, Sarepta Therapeutics stated that it is undertaking substantial cost-saving measures. A workforce reduction of 36% is expected to yield over $100 million in savings by the end of 2025, although this will be offset by expected severance and one-time charges estimated between $32 million and $37 million.
These layoffs come on the heels of critical attention from the U.S. Food and Drug Administration (FDA). Shortly before the announcement, the FDA placed Sarepta’s gene therapy trials for Duchenne muscular dystrophy on clinical hold due to safety concerns related to the Elevidys treatment. Reports indicated that three deaths were potentially linked to this therapy, one of which occurred in a clinical trial for Limb-Girdle muscular dystrophy.
The FDA’s actions also included revoking Sarepta’s platform technology designation, which aimed to streamline the drug development process. Sarepta indicated that it initially learned of the FDA’s clinical hold through media reports. Despite the FDA’s request to voluntarily halt shipments of Elevidys, the company has refused, expressing a commitment to engage in further discussions with the FDA to ensure patient safety and access to care.
Previously, the FDA had directed Sarepta to limit the use of Elevidys to ambulatory patients only. In response, the company is working on updating the treatment label and exploring an enhanced immunosuppression regimen intended to mitigate risks of acute liver failure.
The timeline for when these layoffs will be completed remains unclear as the company navigates these significant challenges.
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