Alexion is slashing its workforce by around 20% and closing sites in a bid to save $250 million a year, with R&D bearing the brunt and accounting for around two-thirds of the cost cutting.
The restructuring will claim around 600 jobs and, according to senior management, is intended to answer a “critical need to rebuild pipeline” as Alexion starts to prepare for the loss of patent protection for cash cow drug Soliris (eculizumab)—which currently accounts for the bulk of the company’s revenues—within the next few years.
Alexion first revealed its intention to revamp the business earlier this year under new CEO Ludwig Hantson and CFO Paul Clancy, and has already pared down R&D to four key areas, namely hematology, nephrology, neurologic and metabolic disorders, and scrapped a series of partnership deals.
Around $100 million of the savings will be routed back into R&D and business development, said Alexion, with the biotech expecting to make a series of licensing, partnerships and bolt-on acquisition deals to add to its current R&D portfolio. It wants to be spending 18%-19% of sales on R&D by 2018-2019, according to Clancy, who also said that the new deals are expected to be relatively small and not add too much debt.
Among the other big decisions is the relocation of its headquarters from New Haven to Boston within the next 12 months, with Boston having around 400 positions and New Haven retaining around 450 staff, including 150 focusing on lab and process development work for Alexion’s top priority complement R&D program.
Explaining the HQ move, Hantson said on a conference call that it is important to be close to Boston hub to tap into talent pool and future partners.
Complement—and specifically lead candidate ALXN1210, an anti-C5 antibody in late-stage development for paroxysmal nocturnal hemoglobinuria (PNH)—is now the key R&D focus, he said. The company also confirmed it is “eliminating the spend and headcount” in lower priority programs including enzyme replacement drug ALXN1101 for molybdenum cofactor deficiency (MoCD) Type A and cancer candidate ALXN6000 (samalizumab).
Hantson said on the call that the company’s research focus is “moving from ultrarare to rare, but staying in the orphan disease space.”
As it stands, ALXN1210 is the main focus, and head of R&D John Orloff, M.D., told analysts on the call that a trial in untreated PNH patients and a second in patients switched from other medicines are now fully enrolled and due to generate results in the first half of 2018, setting up possible approvals a year later.
The shake-up at the firm followed sales fraud investigations involving Soliris that resulted in the resignation of long-serving CEO David Hallal. Other initiatives include the closure of a Rhode Island manufacturing plant and shuttering of multiple offices worldwide, with the total cost of the downsizing expected to come in at between $340 million and $440 million.
By Phil Taylor
Source: Fierce Biotech
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