Facing financial problems and development setbacks, six biotech companies are taking drastic steps.
A new board at Canada’s QLT hopes to fix a “precarious financial position.” In 2011, the firm lost $30 million, despite revenues of $42 million. To align spending and headcount, the board has cut 146 jobs. The remaining 68 employees will focus on the firm’s oral retinoid program. Advisers will determine whether to sell or spin off QLT’s punctal plug drug delivery technology and possibly partner or sell its Visudyne eye drug. The firm expects to break even in 2012.
Another Canadian firm, Cardiome Pharma, is cutting 85% of its workforce after Merck & Co. stopped work on an oral form of Cardiome’s heart drug vernakalant. The cutbacks will eliminate internal research. Cardiome interim CEO William Hunter wants to preserve cash and focus on intravenous vernakalant with Merck.
Chelsea Therapeutics is facing a delay in the approval of its hypotension drug Northera. The North Carolina company will keep only as many of its 49 employees as it needs to complete the regulatory process. It will explore strategic options for its business, which had no revenues and a $50 million loss in 2011.
To cut costs, Savient Pharmaceuticals will reduce its workforce by 35%, or about 60 employees. The New Jersey-based firm had about $10 million in revenues last year and a loss of $102 million. It predicts $56 million in annual savings by 2013 as it focuses on selling its gout drug Krystexxa.
In light of market pressures, Switzerland’s Actelion is cutting 135 positions, or about 5% of its workforce, and emphasizing R&D in specialty areas.
Meanwhile, Biolex Therapeutics has shut down entirely. Having reportedly raised $190 million over the years from investors, the North Carolina-based firm lists $38 million in debts in its bankruptcy filing. Its main asset is Locteron, a controlled-release form of interferon-α to treat hepatitis C.
“It is a challenging financing environment, and within that the fates of individual companies and technologies move in all sorts of directions,” says Glen Giovannetti, global life sciences leader at Ernst & Young. “Long term, I think we are in a period of contraction.”