South San Francisco, CA April 11, 2016
SOUTH SAN FRANCISCO – Molecular diagnostic company Counsyl, which was backed by entrepreneur Peter Thiel, known for backing PayPal and Facebook, terminated 27 employees, about 6 percent of its staff, as part of a restructuring plan, Fastcompany.com reported.
Ramji Srinivasan, chief executive officer of Counsyl, said the job cuts were made to “structure the company around advancing our relationships with clinicians and medical providers,” GenomeWeb reported. The positions cut were in sales support, marketing, design, and engineering. Counsyl employs approximately 400.
While the cuts were made to those departments, the company is still hiring for several positions, including positions in the clinical lab departments, administration and operations, according to the company website.
GenomeWeb noted that Srinivasan said in his statement that the layoffs are “not a result of stagnant test growth and that the firm has ‘double-digit’ growth in its carrier screening product, as well as ‘rapid uptake’ of its NIPT and inherited cancer tests.” On FastCompany, there was speculation the company was streamlining its operations in order to prepare for the company to go public, particularly after the company raised $100 million in financing.
Counsyl has been a rapidly growing company behind the early success of its DNA testing for diseases. Some of the products the company provides allows couples who are pregnant or are thinking of becoming pregnant to screen for potential genetic diseases. Counsyl provides services to screen for diseases where early detection will make a difference in the way individuals and physicians approach treatment therapies. Counsyl has screened more than 500,000 patients and served over 8,000 health care professionals.
The early months of 2016 were not good for pharmaceutical and biotech companies looking to go public. Only a handful of companies in the industry have gone public this year, a far cry short of the 169 biotech companies that went public in the first months of 2015. So far this year, the S&P 500 Biotech Index is down about 20 percent and the Nasdaq Biotechnology Index is down more than 26 percent since the beginning of the year.
To help with its rapid growth, in January Counsyl tapped Ted Snelgrove as chief business officer in order to focus on driving product management and commercial strategies. In a statement, Srinivasan said he anticipates Snelgrove will “continue to scale the company to serve millions of new patients and tens of thousands of physicians.” Before joining Counsyl, Snelgrove served as CEO at CellScape, an early player in the NIPT market and was the Oncology/Hematology Business Unit Head at Jazz Pharmaceuticals (JAZZ).
Thiel is known for his investments in tech companies, as well as for his San Francisco-based nonprofit Breakout Labs, which has helped fund the launch of several biotech startups, such as 3XBio, Ion Dx and Neumitra.