Counsyl’s foray into oncology didn’t last long.
The company is effectively shutting down its cancer business unit and axing 24 jobs — around 5 percent of its workforce — after announcing in May that it had launched that effort.
Counsyl cofounder and CEO Ramji Srinivasan confirmed the news on Friday in a statement forwarded by a company representative. The company’s rationale is to double-down its focus on women’s health and preventive carrier screening.
“Having a single, focused sales team will allow us to operate more efficiently and offer providers multiple different tests simultaneously, saving them time and improving clinical decision making for their patients,” he said in the emailed statement. “By consolidating these teams, we will also be able to channel more resources into Women’s Health R&D, so that we can continue to innovate and deliver the best screening products on the market.”
The company declined to comment on whether the move was part of an effort to improve the company’s financial health in preparation for an IPO.
Counsyl has raised $102 million to date, through seven private financing rounds. The most recent round, a Series D, closed in May 2014.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Founded in 2007, the South San Francisco, California-based company first applied its genetic screening and counseling services to women’s and reproductive health.
Then in May 2016, Counsyl launched a dedicated cancer screening unit with an aim to help consumers better understand their risk of inherited cancers.
Counsyl’s flagship diagnostic tests are ordered by licensed healthcare providers. While the company has established inroads with women’s health and primary care practitioners, the new project sought to deepen the company’s relationships with oncologists through a specialized sales team.
According to Srinivasan, the company will not fully withdraw from the cancer space. Instead, it will focus its efforts towards carrier and preventive cancer screening, which can be typically prescribed through its core base of women’s health and primary care providers.
The individuals affected by the job cuts have reportedly been informed through a meeting Friday morning.
“We anticipate that some of our dedicated oncology staff will remain at Counsyl in new roles to continue to serve the large & growing market for cancer risk screening in the preventive genetics market,” he said.
This is not the first round of layoffs at the company. In April, news surfaced that the Peter Thiel-backed company laid off 27 employees in sales support, marketing, design and engineering.
Meanwhile, some Counsyl employees have found employment elsewhere.
On Friday, San Francisco-based Omada Health announced four new senior hires, which included three from Counsyl. Omada’s new chief commercial officer, Tom Schoenherr, spent over five years at Counsyl and is credited with helping to grow its revenues from $1 million to $100 million during that time period.
Former VP of Health Plans, Rob Guigley, has joined Omada as vice president of sales, heading its health plan and reimbursement strategy. And former VP of sales for women’s health at Counsyl, Mark Konopka, is coming over to the digital health company as its VP of sales, leading Omada’s employer and health system strategy.
Despite being announced on the same day, Srinivasan said there is no connection between Omada’s hiring and the closing of its oncology business.
“The decision to release the oncology sales division is part of Counsyl’s decision to deepen our focus on our Women’s Health market and is unrelated to the departures of our former employees.”
The company stated that no further cuts are planned.
Photo: MarsBars, Getty Images
