Biopharmaceuticals: Ariad and Dendreon cut jobs after setbacks with marketed drugs

Approved drugs generally pose less business risk than candidates still in development. But as two leading biotech firms have discovered with their only marketed products, things can still go wrong, and with serious consequences.

Ariad Pharmaceuticals says it will eliminate about 40% of its U.S. staff positions, or 160 employees. The cuts follow the firm’s decision last month to suspend U.S. sales of the leukemia drug Iclusig after concerns arose about its side effects. FDA approved Iclusig late last year to treat two rare cancers under its priority review program. European regulators followed suit in July. The Cambridge, Mass.-based company hopes to restart U.S. sales after revising prescribing information.

Similarly, Seattle-based Dendreon is cutting about 150 jobs to reduce expenses by $125 million. It will have about 820 employees, down from a peak of 2,000 a few years ago. The company has been shedding jobs since 2011 as it struggles to become profitable. Its sales of Provenge, a prostate cancer immunotherapy approved in 2010, have been far below expectations, and more competition has emerged.

The cuts by Ariad and Dendreon come as U.S. pharmaceutical industry employment is plummeting. In October, the industry announced 10,585 job cuts, according to Challenger, Gray & Christmas, a Chicago-based outplacement consulting firm. It was the largest monthly total since July 2011, when 13,493 jobs were eliminated. In both cases, Merck & Co. was responsible for the majority of cuts. Between January and October of this year, the pharma industry in the U.S. has slashed 19,507 positions.