- In a significant shake-up, Momenta Pharmaceuticals will lay off half its workforce, begin talks to largely leave a biosimilar collaboration with the generic drugmaker Mylan and let go of its co-founder along with several other executives.
- CEO Craig Wheeler said the changes will refocus the company on its rare immune-mediated disease pipeline. The Cambridge, Massachusetts-based pharma announced the moves Monday on an investor call, while the board approved the wide-reaching restructuring plan on Sept. 26.
- Momenta expects the efforts will save $250 million over the next five years. The layoffs will also cost between $17 million to $20 million through 2018. On Wall Street, the pharma's stock recovered from an early dip Monday morning to close at roughly where it started the day.
The rough goal of an earlier strategic review was to ditch its biosimilar business for a cash infusion that could help fund development costs for its drug candidates. That didn't exactly happen, Wheeler, the CEO, explained Monday on a conference call.
"Some potentially attractive opportunities were explored," he said. "However, through multiple rounds we encountered various issues including overlapping portfolios and the increasingly challenging political climate associated with international investment in U.S. business."
"As a result, we have made the decision to restructure the company on our own," he added.
Momenta has begun talks with partner Mylan to exit previous joint efforts to develop five biosimilars. It will continue on with Mylan for one biosimilar of Regneron's Eylea (aflibercept).
The company will also push on with its own copycat of AbbVie's mega-blockbuster Humira (adalimumab), which is already fully developed.
These will require significant short-term investment, Wheeler said, with the hope eventual revenue can help fund future Phase 3 clinical trials for its own drug candidates.
For its Humira biosimilar, the company plans to apply for U.S. approval in the fourth quarter of 2018 and European approval in the first half of 2019. Wheeler said it could begin generating revenues in Europe "as early as 2020," and the company will also look for global partners to help with manufacturing and marketing expenses.
Humira copycats from other companies are set to launch in Europe this month.
The Eylea copycat, meanwhile, is in Phase 3 testing and faces less competitive pressure. Wheeler targeted a 2023 launch date at the earliest.
Before those two biosimilars can start bringing in money, the company will need to bring in additional funding since this restructuring failed to do so, Wheeler noted.
Along with largely pivoting away from biosimilars, the company expects to save $250 million in the next five years by laying off 110 workers primarily involved with biosimilars, leaving 116 others employed. About 75% of those cuts will be effective Oct. 5, including among its leadership.
The five executives to be terminated Oct. 5 filled the leadership roles of chief financial officer, chief operating officer, chief scientific officer, among others.
Momenta's co-founder Ganesh Kaudinya is one of the five. Kaudinya is serving as both chief operating officer and chief scientific officer, and began working at Momenta after co-founding the company in 2001.
Just a year ago, Kaudinya was promoted to COO on Oct. 2, 2017, with Wheeler praising him as "a cornerstone at Momenta since its inception." Now, he will be leaving, although he did agree to temporarily stay on along with two others in consulting roles for $275 an hour to help the company transition.
Michelle Robertson will be promoted to fill the CFO role. Robertson, 51, joined the company in May 2017 after previous leadership stints at Baxalta, Ironwood Pharmaceuticals and Genzyme.