- Danish drugmaker Novo Nordisk announced Tuesday plans to restructure its R&D business, including laying off 400 workers from R&D operations in Denmark and China.
- The reorganization is meant to "accelerate the expansion and diversification of its pipeline across serious chronic diseases," according to a Sept. 18 statement. By year's end, Novo expects to have in place four "Transformational Research Units" focused on finding new therapies and technologies.
- Additionally, Novo said it will be investing more heavily in automation, machine learning and artificial intelligence to speed up drug discovery, as well as laboratory infrastructure and information technology to make R&D more efficient.
Facing headwinds in its core therapeutic areas of diabetes and hemophilia, Novo has tried to trim down costs by reorganizing its commercial and research operations over the last couple years. So far, that's meant hundreds of job cuts.
"Delivering on our ambition of achieving even higher levels of innovation across a broader and more diverse range of chronic diseases requires that we have the optimal future skill base and allocate resources to our priority areas," Mads Krogsgaard Thomsen, Novo's chief science officer, said in a Sept. 18 statement.
"Unfortunately, this implies that a number of valued colleagues will lose their jobs in order to ensure that we have sufficient new research capabilities needed to support our long-term growth ambitions."
In another recent example, a Danish financial newspaper reported that Novo was considering up to 3,000 layoffs — speculation Novo declined to comment on in a June 8 email to BioPharma Dive. Notably, the report came as Novo was coming up with a strategy for dealing with increased Medicare Part D rebates in the U.S.
"It’s premature to discuss what these plans may look like, because the Part D rebate is only one of many factors that we need to take into account when planning for the future. We are operating in a dynamic environment that brings new challenges and opportunities every day, which means we continually assess and adjust plans as needed. And whenever we make important decisions, we will communicate them at the appropriate time," Novo wrote in its June email.
Reports, announcements show layoffs have been integral to Novo's reorganizing
|Announcement date||Anticipated layoffs||Main business unit affected|
|November 2017||185||Commercial operations|
|September 2016||1,000||R&D, headquarters staff|
*From a third-party report that Novo at the time declined to comment on.
In the meantime, Novo's bottom line is suffering. The company recorded net sales of 54.3 billion Danish krone ($8.83 billion using average exchange rates cited by Novo) for the first half of 2018, a 5% decline from the same period a year prior.
The weaker performance was due in part to lower sales from blockbuster brands like Novo's long-acting insulin Levemir (insulin detemir [rDNA origin] injection) and its hemophilia therapy NovoSeven (Coagulation Factor VIIa [Recombinant]). It's therefore unsurprising that much of Novo's attention has been on building out its portfolio to offset those downtrends.
But rather than acquire market-ready drugs, Novo's investments have gone to clinical-stage assets.
Early this year, the company tried to acquire Belgian biotech Ablynx and its suite of investigational nanobody drugs, but was outbid by Sanofi. Novo would have more success with Ziylo, a U.K.-based company specializing in synthetic glucose-binding molecules that Novo picked up in August through a deal potentially worth more than $800 million.
On the blood disorder front, Novo also recently put up $400 million for rights to an experimental combination therapy from EpiDestiny that may hold promise in treating sickle cell disease.