Sector News

Valeant welcomes Dendreon into the fold with a 77-job shearing

March 3, 2015
Life sciences
It’s no secret that when serial acquirer and cost-cutting enthusiast Valeant takes over a company, layoffs are on the way. And for Dendreon, the bankrupt Seattle biotech whose assets the Canadian snatched up last month, they’ve already begun.
Seventy-seven employees will pack their bags, according to a WARN notice seen by the Seattle Times. Washington’s state Employment Security Department received word of the job cuts Feb. 23, immediately after Valeant wrapped its $400 million buyout of Dendreon’s flailing prostate cancer vaccine, Provenge, along with other prospects.
“Most of these positions were in G&A functions where there was overlap with Valeant’s existing businesses, especially in corporate and back office functions,” Valeant spokeswoman Laurie Little told the paper in an email.
It’s the first opportunity of many that CEO J. Michael Pearson sees for squeezing out costs. As he said on last month’s fourth-quarter earnings call, Valeant can wring some money out of Provenge’s infrastructure, which was “built for a billion-dollar product.” All told, he foresees more than $130 million in spending cuts, including manufacturing savings–and that’s before factoring in the benefit of Valeant’s Canadian tax domicile.
“We believe that we have the ability to raise the gross margins of this business to more than 65% by the end of 2015 and to reach 80% gross margins in the longer term,” he told investors on the call.
The news may have some Salix employees bracing for the worst. Valeant snagged the North Carolina drugmaker shortly after inking the Dendreon deal. Pearson has said the company’s specialty sales reps are safe; he’ll need them to help with a couple of key launches, especially if Salix’s lead product, Xifaxan, wins an IBS indication this spring.
But with the Quebec-based drugmaker looking to slash more than $500 million in operating costs on the Salix deal, primary care reps may not be so lucky. Valeant hasn’t “had the time to fully determine the optimal size of the primary care sales force,” Pearson said on the call, but it’ll do so between now and when the deal closes–an event Valeant expects next quarter.
By Carly Helfand

Related News

September 18, 2020

Eli Lilly, Amgen join forces to scale production of COVID-19 antibody cocktails

Life sciences

Months of fervid research have whittled away most potential options to treat patients with COVID-19, a group of antibody cocktails still hold promise. Eli Lilly believes so strongly in its contender that it’s […]

September 16, 2020

Takeda unveils new Boston R&D manufacturing center for cell therapy pipeline push

Life sciences

Japanese drugmaker Takeda has trumpeted its plan in recent years to cut billions of dollars in costs and pivot around oncology and rare diseases. A key part of that strategy […]

September 15, 2020

AstraZeneca, Oxford restart stalled COVID-19 test as Pfizer ramps up trial numbers for its vaccine

Life sciences

Just under a week after it stopped its key phase 3 pandemic vaccine test, AstraZeneca and the University of Oxford have been given the green light to restart in the […]