Rare Daily Staff
Rare disease drugmaker Alexion Pharmaceuticals said it would eliminate 20 percent of its workforce and move its headquarters to Boston from New Haven, Connecticut, as part of a restructuring expected to save the company $270 million annually by 2019.
The company said the resulting savings will allow it to prioritize investments to advance growth opportunities, optimize capabilities across the organization, and position Alexion to deliver on its financial ambitions. It expects the savings to allow it to reinvest approximately $100 million a year into research and development through dealmaking and proof-of-concept studies starting in 2018.
Alexion anticipates total pre-tax restructuring and related expenses in the range of $340 million to $440 million. It said its revenue guidance remains unchanged, but GAAP EPS guidance will be impacted by restructuring and related expenses and 2017, while non-GAAP EPS guidance remain unchanged.
Ludwig Hantson, CEO of Alexion, said by streamlining operations, Alexion will create “a leaner organization with greater financial flexibility.” He said this will allow the company to grow its rare disease business and pursue deals to expand its pipeline.
Hanston took the helm of Alexion in March after a tumultuous period for the company that included an internal investigation into allegations of improper sales practices relating to Soliris, its treatment for rare blood disorders. The company said the investigation found no wrongdoing, but did reveal a weakness in its internal controls relating to financial reporting. In May, police in Brazil raided the company’s offices there as part of an investigation into its sales practices. And Bloomberg reported in July that the U.S. Department of Health and Human Services was investigating the company.
At the same time, Wall Street has grown concerned with slowing sales growth, potential new competition for Soliris, and disappointing sales of Kanuma, its enzyme replacement therapy for lysosomal acid lipase deficiency, which it acquired in 2015 through the $8.4 billion acquisition of Synageva Biopharma.
While the company will establish a new headquarters in Boston by mid-2018 with 400 employees, it will keep a research Center of Excellence in New Haven, Connecticut with about 450 employees. It said the move to Boston will allow it to access a larger pool of biopharmaceutical talent and put in closer to a range of potential partners to support its future growth.
September 12, 2017