Alexion to cut R&D, 7% of workforce
- Alexion Pharmaceuticals plans to trim its global workforce and kill at least one of its R&D programs as part of a company-wide restructuring effort, according to multiple reports.
- "Alexion initiated a companywide restructuring to help position the company for sustainable, long-term growth that will allow us to fulfill our mission of serving patients and families with rare diseases," a spokesperson for the company said in a March 14 email to BioPharma Dive.
- "The fundamentals of our business remain strong and Alexion has tremendous growth potential," the spokesperson added. "We are investing our resources in key growth drivers, including our portfolio of marketed products, the potential launches of Soliris in refractory gMG, and our most promising R&D programs."
The New Haven, Conn.-based drugmaker has not detailed how the anticipated 7% reduction in employees will affect each of its departments. By the end of 2016, Alexion had 3,121 full-time employees, according to its most recent 10-K filing with the Securities and Exchange Commission. Given those numbers, the expected job cuts should affect around 218 positions.
The restructuring efforts are likely aimed at putting Alexion on a more successful path after a difficult 2016. The company has increased focus on its rare blood disorder drug Soliris (eculizumab) as patents protecting the big breadwinner from competition are nearing expiration. During a fourth quarter earnings call, Alexion said it is prioritizing a pipeline drug, ALXN-1210, that should compliment Soliris.
The floodgates began opening for Alexion last summer, when a Canadian court shot down a claim from the company that it would be unconstitutional for the country's Patented Medicine Prices Review Board to place a price cap on Soliris
What's more, the court determined Alexion had overpriced the drug from 2012 to mid-2014, and requested the company give back excess revenue and lower the list price. Solaris, well-known as the world's most expensive medication, holds a price tag of $669,000 per patient per year in the U.S. In Canada, the drug has become even more costly.
The company's fortunes did not improve as the year went on, either. In November, the company initiated an audit after a former employee sounded the alarm about some shady sales practices. Two top Alexion executives — former CEO David Hallal and former Chief Financial Officer Vika Sinha — left less than a month later, citing personal reasons and the pursuit of other opportunities, respectively, for their departures.
By January, the audit concluded senior management had established an atmosphere that stressed Soliris sales goals more than enforcing compliance protocols, a tone that led to "inappropriate business conduct," according to a company statement.
Pipeline and clinical problems have also persisted. Soliris failed a Phase 2/3 trial studying the drug's prospects as a preventative treatment of delayed graft function in patients who had received liver transplants. And just last month, the company announced the shelving of its candidate for mucopolysaccharidosis (MPS) IIIB.
Alexion shares have fallen about 3% to $123.57 per share since Friday's market close.
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