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2seventy Bio (NASDAQ:TSVT) rose 8% amid a push from activist investor Engine Capital for a board refresh and the appointment of its chief operating officer as CEO of the cancer therapy developer.
Engine Capital, which has a 3% stake in 2seventy (TSVT), wants the company to focus exclusively on its Abecma drug and immediately cease to monetize all development programs, according to a letter the investor wrote to the board on Wednesday. The activist also wants the company to immediately reduce corporate overhead, appoint COO Chip Baird as CEO and “sever ties” with CEO Nick Leschly.
“In conclusion, 2seventy’s value creation opportunity is significant, but the Board must act with a sense of urgency to stop the cash burn, protect the balance sheet and the underlying value of Abecma,” Engine Capital Managing Partner Arnaud Ajdler wrote in the letter. “Unless the Board takes drastic measures along the lines we urge in this letter, we believe the company will likely be bankrupt in a couple of years.”
The activist letter comes after 2seventy Bio (TSVT) announced in September that Leschly will step down from his current role as CEO and take up the position of chairman. Baird, who was CFO, was promoted to COO. The company also said that it will cut down 40% of its workforce and internally advance fewer pipeline programs in a bid to cut down costs.
2seventy bio (TSVT) didn’t immediately respond to Seeking Alpha email request for comment. TSVT has short interest of 29%.
Image and article originally from seekingalpha.com. Read the original article here.