4 more biotechs cut staff amid market tumult

Four biotechnology companies are laying off staff in the latest examples of cutbacks in a sector struggling to hold its footing amid financial market turmoil.

On Thursday, Vor Bio, Korro Bio, Rallybio and Insitro all revealed plans to cut at least a fifth of their respective workforces. For Vor, the developer of a type of CRISPR-aided stem cell transplant, those cuts were particularly steep, involving 95% of its employees and a wind-down of its clinical and manufacturing operations.

The announced layoffs come during a tumultuous time for U.S. biotechs. Leadership turnover, staffing cuts at public health agencies, as well as the threat of pharmaceutical tariffs and new federal drug pricing policies have created market volatility that’s made it more difficult for companies to raise funding. Dealmaking, which helps drive investor interest in biotechs, has slowed, and initial public offerings — already difficult for companies to pull off — have essentially ground to a halt since February.

Those forces have pressured private and publicly traded drugmakers alike. On the public side, many companies have such depressed stock prices that they’re worth less than their cash holdings. Startups, meanwhile, are staying private for longer and being pushed by their venture backers toward pharmaceutical collaborations to fill funding gaps.

Many drug companies are also cutting costs to reach key study readouts that can boost their value. For instance, Korro’s layoffs, which affect about one-fifth of its workforce, are meant to give the RNA editing company enough time to complete an early-stage study for its lead program next year, nominate a second development candidate and advance a partnership with Novo Nordisk.

“Streamlining the organization is essential to enable Korro’s long-term success,” said Todd Chappell, the company’s chief operating officer, in a statement. Following the restructuring, the company should have enough cash to operate into 2027. Korro had 112 full-time employees at the end of March, according to a regulatory filing.

Insitro is taking similar steps. The company, a privately held AI drug discovery specialist, is laying off 22% of its workforce, leaving it with about 230 workers. In an emailed statement, Insitro noted how the restructuring would “sharpen our focus on key priorities,” ensure “clinic readiness” next year, and keep running into 2027. “This is a prudent step amidst macroeconomic uncertainty,” Insitro said.

In some cases, biotechs have been forced into multiple restructurings to survive. Rallybio, whose shares have lost nearly all of their value since an $81 million initial public offering four years ago, laid off 45% of its workforce in 2024 and announced intentions to cut another 40% on Thursday.

Increasingly, investors are pressing struggling biotechs to shut down and return cash to shareholders rather than pivot strategically or merge with another drugmaker. Multiple activist firms have pressured company boards in recent months, and one biotech, Third Harmonic Bio, approved a liquidation plan three weeks ago.

Vor may be headed down a similar path. The company was expected to disclose updated clinical study results in the first half of the year. But on Thursday, it cited “currently available clinical data from its key clinical programs” as well as a “challenging fundraising environment” for its decision to terminate nearly all of its staff and shutter its clinical work. Vor has begun a strategic review that could end in a variety of outcomes, among them a sale, but it will be left with only about eight employees following the layoffs.

Data compiled by Fierce Biotech show 95 drugmakers have cut staff this year.

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