Pharmaceutical firm Elan, which recently said it was for sale or alternatively available for a strategic alliance, today announced it plans to cut 115 jobs at its Irish operations as part of an ongoing strategic review process. It is understood that most of the job cuts will be made in Athlone and another 115 will be cut in the US, to total 230 reductions.
In less than plain English, Elan said "as previously guided, and as part of its ongoing efforts to consistently and rigorously manage its overall cost base and direct additional investment toward its promising and late stage pipeline, it will refine its business operations and functions to realize greater efficiencies and deepen its commitment and focus to key and strategic areas."
Elan said it will continue to have two related but distinct operating divisions: Biopharmaceuticals and Elan Drug Technologies.
Specific adjustments include a postponement of biologics manufacturing activities, a strategic redesign and realignment of the R&D organization within the Biopharmaceutical business, and a reduction in related G&A and other support activities.
The adjustments, largely driven by changes in the Biopharmaceuticals business, will result in a reduction in Elan’s global workforce of approximately 230 positions, or 14% of Elan’s workforce. In Ireland, where Elan’s biological manufacturing and related fill finish activities are based, approximately 115 positions will be impacted. A further approximately 115 positions will be affected in the United States, mainly in the areas of research, clinical development, biopharmaceutical development, and related corporate support and administrative services. Elan said it "expects to reassess the opportunity to invest in a biologics manufacturing facility and restart its related fill finish activities after the company has had the opportunity to evaluate the data from the Phase 3 trials of bapineuzumab in Alzheimer’s disease."
The job cuts are being made the company's biopharmaceuticals business as Elan waits the outcome of its phase three trials on its new Alzheimer's drug, bapineuzumab. The job cuts will occur at its 'fill-finished' facility in Athlone and at its "strategic approach to biological planning operations' across both Dublin and Athlone.
Another 115 jobs will go in San Francisco in the US.
The company last year closed its offices in New York and Tokyo and had indicated more job cuts in its last results announcement.
Elan said the job cuts are part of its ongoing efforts to rigorously manage its overall cost base and direct more investment towards its "promising and late stage" pipeline of drugs.
Other moves include a postponement of Elan's biologics manufacturing activities and a strategic redesign and realignment of its reseach and development organisation within its biopharmaceutical business.
Elan says it expects to reassess the cuts after it has had the opportunity to evaluate the data from the Phase 3 trials of bapineuzumab.
Elan says today's measures will reduce operating expenses this year by $30-35m. The firm repeated its financial guidance for 2009 and said it expects revenue to grow by a double digit percentage.
The company said this internal review was conducted separately from the previously announced and continuing strategic review process being undertaken by Citigroup Global Markets.
Elan has a global workforce of 1,700. It employs about one third of these in Ireland, or 580 people.
The company's shares were up 1.4% to €5.05 in Dublin, in the early afternoon.
