Health Data Research Company That Expanded in Connecticut Is Downsizing, Downsizing and Moving a Lab to Maryland – Hartford Courant
Sema4, a health data research company that was lured to Connecticut from New York in 2018 with a state loan and expanded to keep up with the growth of medical technology, downsized its operations and laid off workers.
The Stamford-based company posted a second-quarter loss on Monday and its share price fell 16.3% on Wednesday, closing at $1.34. Shares plunged 33% on Tuesday.
Sema4 is making interest-only payments on $15.5 million state loans, according to the Ministry of Economic and Community Development. He owes $11 million in principal and the remaining $4.5 million has been forgiven.
Sema4 Holdings Corp. announced that its founder, Eric Schadt, resigned on Monday as president, director of research and development and a director of the company. He gave no reason.
Announced layoffs and Sema4’s reduced presence in Connecticut became a political issue on Wednesday when Republican gubernatorial nominee Bob Stefanowski said Gov. Ned Lamont was not doing enough to keep Connecticut doing business.
It’s a dramatic reversal for Sema4, which was spun off from the Mount Sinai Health System in 2017, promising changes in clinical diagnostics by combining screening and diagnostic testing, predictive modeling and open data.
It expanded in 2020 with a 70,000 square foot building in Stamford to handle genomic testing. This was its third location in Connecticut intended to keep pace with the growing demand for data-driven healthcare.
Sema4 posted a loss of $85.7 million in the second quarter on revenue of $36.2 million. Results for the quarter were higher than a loss of $46.1 million in the same three months last year and revenue was down from $47 million.
Sema4 said it expects revenue for the year to be between $245 million and $255 million, down $60 million from previous guidance and below Wall Street estimates of about $306 million. of dollars.
Sema4 announced on Monday that it is leaving the business of somatic tumor testing – the study of cancers resulting from DNA damage unrelated to hereditary characteristics. — and will close its clinical laboratory in Branford by the end of the year. The line of business represents less than 1% of the company’s revenue of $326.8 million in 2021, he said.
Chief Executive Katherine A. Stueland told industry analysts on a conference call on Monday that due to the number of companies focused on somatic oncology and Sema4’s “subscale position,” investing in the tumor screening activity is “not strategically or financially justified”.
The release of somatic oncology is intended to reinforce Sema4’s focus on profitability, she said.
The company said it would cut around 250 jobs, or 13% of its workforce. Taking into account the job cuts prior to the first half of the year, the company has now cut about 30% of its jobs.
Sema4 also said it would move its hereditary cancer screening operations to Gaithersburg, Maryland, from Stamford in late September. The move will improve profitability by leveraging automation at the Gaithersburg clinical laboratory, the company said.
Layoffs in the digital health and health technology sector include meditation app Calm which cut its staff by 20% and Signify Health which eliminated nearly 500 jobs. Pear Therapeutics Inc. said in a regulatory filing it cuts 25 jobs, or 9% of its workforce. Included Health and other companies also announced layoffs.
Sema4 was caught up in politics last year when Annie Lamont’s venture capital firm invested in the company. Her husband, the governor, said at the time that no profit had been made and that everything would be donated to charity. Potential conflicts of interest became an issue because Sema4 was among four companies that signed contracts with the state to perform COVID-19 testing in Connecticut.
The Sema4 contract was negotiated by the Office of the State Comptroller.
Lamont later said his wife would give up investing in Connecticut because of the political fallout.
“Annie is in Nashville, where she’s building businesses, because Connecticut is pretty complicated,” he said in November 2021. “It’s probably a lot easier to start this game-changing business in Nashville than in Stamford.”
Stefanowski on Wednesday returned the comment to the Democratic governor.
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“Governor. Lamont meant it when he said his family had given up investing in Connecticut businesses because ‘it’s too complicated here,'” he said. “Connecticut’s business community needs for help and leadership to cut taxes, train a world-class workforce and pay off the $450 million unemployment insurance loan that is stifling business growth.”
Jake Lewis, spokesman for the Lamont campaign, said as a former small business owner, the governor knows what businesses need to thrive and grow.
“From historic investments in workforce training programs to providing millions in grants and loans to the largest tax cut in state history, Connecticut is back to work harder than ever,” he said. “The only thing that could stop such progress is electing Bob Stefanowski, who has not only bragged about laying off employees, but has also proudly advised companies on how to outsource American jobs.”
Sema4 has benefited from the growth of personal medicine, or medical care that uses genetic or molecular profiling, and genomics, which focuses on the sequencing and analysis of an organism’s genome, the DNA content of a cell.
BTIG analyst Mark Massaro said in a research note Wednesday that he expects double-digit revenue growth this year through 2025 as Sema4 supports additional health systems and expands offerings in women’s health and oncology. However, he said Sema4 was at risk of depending on a limited number of product and service providers for data and analytics.
At the end of 2020, Sema4 employed 225 people in its Stamford lab and planned to hire 150 the following year. It employed 100 people in Branford and about 250 at its Stamford headquarters.
Stephen Singer can be contacted for comment.