US biotechnology company Biogen Idec has succumbed to the effects of having to withdraw its multiple sclerosis drug Tysabri (natalizumab) earlier this year, cutting 17 per cent of its workforce and putting manufacturing facilities up for sale in a bid to cut costs by $200-$300 million a year.
Tysabri had been tipped as a potential billion dollar-plus drug for Biogen Idec and partner Elan when it was launched onto the market, but had to be withdrawn in February after cases of a rare brain disease were linked to the drug. The companies are still hoping that Tysabri will return to the market, but meantime Biogen Idec has been left with a hole in its product portfolio, and analysts said the decision to restructure suggests it is losing hope that it will re-launch the product.
Earlier this year, Biogen Idec announced the sale of its Oceanside, California manufacturing plant - built to produce Tysabri and only completed last December - to Genentech.
Around 650 members of staff are likely to lose their jobs, said the company. 250 will come from the company's headquarters in Cambridge, Massachusetts, which has 1,700 employees. The remainder will mainly be in the San Diego area - the home of Idec Pharmaceuticals which merged with Biogen in 2003, as well as from manufacturing operations at Research Triangle Park, in North Carolina. This will result in a pre-tax severance charge of between $30 and $40 million, said the company.
In a statement, the firm said: "While Biogen Idec is well poised for near-term success, we believe that to continue to deliver for patients, employees, and shareholders requires a bold reshaping of the company in an effort to generate high-level, sustainable growth beyond the current decade. The first step in executing our new plan is to discontinue activities and programs that are unlikely to create significant value and reallocate our intellectual and financial resources to growth projects."
Biogen Idec also expects to earmark approximately $200 million a year for business development and external research opportunities starting in 2006 (versus $50 million in 2005). This money will be directed to in-licensing, collaborations and acquisitions, as the company looks to long-term growth and the build-up of its product pipeline.
Amevive on the block too
Biogen Idec also said it had given up on its psoriasis drug Amevive (alefacept), which has failed to live up to commercial expectations, achieving revenues of just $43 million last year, and had decided to sell it. Serono and Genentech's Raptiva (efalizumab) - approved for the same indication - is growing faster despite being second to market, while further competition is coming from Wyeth and Amgen's blockbuster rheumatoid arthritis drug Enbrel (etanercept), approved for use in psoriasis last year.