How Genomic Testing Company GeneDxs Job Cuts and Lab Closures Affect CT

How Genomic Testing Firm GeneDxs Job Cuts and Lab Closures Have an effect on CT

STAMFORD After a 2022 overshadowed by bulletins of main cuts, the genomic testing firm previously often called Sema4 mentioned this week it had moved on from these plans however will keep a presence in Connecticut.

Reduce to Connecticut

In response to an inquiry by Hearst Connecticut Media, GeneDx confirmed this week that its Branford lab had closed final December, whereas its Stamford lab is scheduled to shut by the top of this month.

The lab’s closing displays the corporate’s choice final yr to drop exams for reproductive well being and physique tumors and transfer hereditary most cancers testing from Stamford to its Gaithersburg, Md., lab. Gaithersburg is the hometown of the genomic testing firm, additionally referred to as GeneDx , which was acquired final yr by then-Sema4.

This choice was not made frivolously and was knowledgeable by deep evaluation, dialogue and scrutiny by our administration staff, advisors and board of administrators, mentioned GeneDx CEO and President Katherine Stueland, who beforehand served as CEO of GeneDx earlier than because the acquisition. name final November. We checked out each doable choice to hold the enterprise (reproductive well being) going.

On the identical time, the corporate is transferring ahead with a a lot smaller workforce. Final yr, it introduced it might lay off about 700 staff, with these cuts affecting about 400 staff primarily based in Connecticut. Immediately, it has greater than 1,000 staff, with about 150 primarily based in Connecticut. Its web site lists a variety of openings for positions primarily based in Stamford.

Regardless of the job cuts and workshop closures, the corporate mentioned it’s sustaining its essential places of work at 333 Ludlow Avenue in Stamfords South Finish, the place it leases almost 90,000 sq. ft. It’s seeking to sublet, nevertheless, two of its three flooring there, which cowl about 60,000 sq. ft.

333 Ludlow, Stamford, CT stays the corporate’s headquarters, whereas our 207 Perry Parkway, Gaithersburg handle will stay the corporate’s essential laboratory, the corporate mentioned in a written assertion.

Coupled with different initiatives, akin to a latest public providing anticipated to lift about $150 million, GeneDx officers expressed optimism in regards to the firm’s long-term prospects, regardless of its dismal monetary outcomes lately. It suffered losses of about $549 million in 2022, after losses of about $245 million in 2021 and losses of about $241 million in 2020.

“Getting into 2023 with a brand new company technique and give attention to delivering worthwhile development, our staff is uniquely positioned to allow precision drugs by combining the facility of scalable genomic sequencing with information from our Centrellis platform,” Stueland mentioned in an announcement on final week when the corporate introduced its earnings for the earlier quarter and the yr. Now we have a big alternative to develop pediatric uncommon illness testing, develop into the grownup and neonatal screening markets and construct our information insights enterprise. With our robust steadiness sheet following the profitable shut of our latest public providing, we’re totally funded by way of our anticipated profitability in 2025.

Regardless of GeneDx’s downsizing, biotech trade leaders stay optimistic about Connecticut’s capability to recruit and retain firms.

As with all biotech clusters, there’s a wholesome cycle of firms beginning, rising and shutting. Firms closing or transferring are often attributable to lack of funding, mergers/acquisitions, failed medical trials or failure to satisfy milestones, Daybreak Hocevar, CEO and president of BioCT, a nonprofit advocacy group, mentioned in an announcement. This is a chance for different firms within the state to rent gifted staff.

What’s subsequent without spending a dime lab area?

Regardless of the lab closing, GeneDx officers mentioned the corporate is sustaining its leases for each properties.

In Branford, the lab had occupied your complete roughly 37,000-square-foot constructing at 1 Industrial Avenue, a couple of blocks north of Interstate 95 Exit 55. The corporate signed its present 10-year lease for that property in January 2020, with annual rents starting from from $437,580 to $549,780, in response to a submitting with the Securities and Alternate Fee. His authentic lease there started in 2014.

In Stamford, the corporate’s roughly 70,000-square-foot lab at 62 Southfield Avenue within the metropolis’s Waterside part will shut after a run of simply over two years after opening in late 2020.

The Stamford lab operated below a 27-year lease signed in April 2019, in response to the SEC submitting. The lease primarily consists of 11-month installments whose rents will vary from about $2.7 million to about $3.8 million.

We’re contractually obligated to those leases for his or her remaining time period, Alex Stein, GeneDxs vp of challenge supply with accountability for the corporate’s actual property and actual property technique, mentioned in an e mail. We work with our house owners and our dealer, CBRE, to showcase the properties and generate modern concepts for a way the properties can be utilized. The workshop areas can be totally sublet.

State help below management

Earlier than the races started final yr, then-Sema4 was typically touted by elected officers and enterprise leaders as some of the promising biotech firms in Connecticut. In 2017, it was spun off from New York-based Mount Sinai Well being System into its personal firm.

The state had proven its confidence within the firm by way of subsidies awarded throughout the administration of former Gov. Dannel P. Malloy. Of the $15.5 million in loans the corporate acquired, $7.25 million has been forgiven or successfully changed into a grant, in response to information from the state Division of Financial and Group Growth.

The corporate might earn an extra $3 million in forgiveness, for a complete of $10.25 million. To take action, it might want to achieve a state membership of 173 by December 31 and keep that employment stage for twenty-four months, then improve its charge to 198 by December 31, 2024, and keep no less than this variety of jobs for twenty-four months. It was initially eligible for as much as $12.25 million in forgiveness, however the most forgiveness was diminished by $2 million on account of job cuts and workshop closings.

Within the meantime, the corporate is making month-to-month interest-only funds on the $6.25 million principal steadiness.

Whereas his administration has not awarded any funding to GeneDx, Gov. Ned Lamont continues to face scrutiny over his connections to the corporate, significantly these associated to the corporate’s function from April 2020 to early 2022 as a state contractor for COVID-19 take a look at.

Among the many firms’ first buyers was Oak HC/FT, the enterprise capital agency co-founded by Annie Lamont, who’s married to Ned Lamont. This connection led Ned Lamont to recuse himself from choices about Sema4.

Republicans, together with Bob Stefanowski, the GOP gubernatorial candidate whom Lamont, a Democrat, defeated in final November’s election have questioned the corporate’s testing of COVID-19 for the state. Lamont argued, nevertheless, that the state saved lives by shortly contracting with firms that might take a look at for the virus.; twitter: @paulschott

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