Biogen Idec Planning Cost Cutting Measures: Biotech's Latest Tribulations

by: The Burrill Report

Biogen Idec (NASDAQ:BIIB) will consolidate facilities and cease development of certain research projects as part of cost cutting efforts as it focuses on its most promising programs, Reuters reported. The restructuring follows the arrival of George Scangos, former CEO of Exelixis (NASDAQ:EXEL), as Biogen’s new CEO. Reuters did not name its source because the person was not authorized to speak to the press about the matter. Job losses are expected, but it was not known where the jobs losses would occur or how severe the cuts would be.

The U.S. Food and Drug Administration notified Arena Pharmaceuticals (NASDAQ:ARNA) that it would not approve its experimental obesity drug lorcaserin without additional data and may require additional clinical studies to determine lorcaserin’s benefit-risk profile. Arena and its partner Eisai (OTCPK:ESALY) are seeking approval for the drug in patients who are obese and have at least one weight-related co-morbid condition.

Genmab (OTC:GNMSF) said it will eliminate 33 positions as part of a reorganization aimed to work toward profitability. The reorganization is expected to yield savings of approximately $5.5 million (DKK 30 million). Genmab said it plans to take a disciplined approach in maintaining an efficient operating model, while retaining core skills in-house. The company said the reorganization will contribute to its plan to reduce operating expenses by 20 percent in 2011. No development programs will be discontinued as a result of this reorganization. It is not expected to have a material impact on Genmab's 2010 financial guidance.

Novartis (NYSE:NVS) said its generic unit Sandoz is voluntarily recalling 24 lots of Methotrexate, a widely used injectable chemotherapeutic, because of small glass flakes that could damage blood vessels, cause swelling, and possibly death, Reuters reported. The recall is taking place in the United States. Methotrexate is also used to treat autoimmune disorders, such as rheumatoid arthritis and psoriasis. Sandoz said it has not gotten any reports of adverse events so far.

San Diego-based Phenomix has shut down after it was unable to find a new partner following Forest Laboratories' (NYSE:FRX) decision in April to end it partnership in the development of the diabetes drug dutogliptin, Xconomy reported. The difficulties Phenomix faced reflect the uncertainties around development of diabetes drugs in the face of greater regulatory concerns over safety. The company laid off nearly all of its 45 employees, but has a skeleton crew left while seeking a partner. Phenomix CEO Laura Shawver has left the company, and is now working as a San Diego-based entrepreneur-in-residence for 5AM Ventures.

The National Institute for Health and Clinical Excellence, which advises the United Kingdom’s National Health Service on whether a drug is worth its cost, said that it would not recommend GlaxoSmithKline's (NYSE:GSK) Revolade for the treatment of chronic immune ITP, a bleeding disorder. In final guidance published October 27, NICE said its independent Appraisal Committee was unable to recommend the drug because evidence of its long-term effectiveness is “unclear.” The availability of alternative treatments and the high cost of the drug led to the decision.

AMAG Pharmaceuticals said it will cut about a quarter of its workforce after it found potential safety issues with its key kidney drug Feraheme, Reuters reported. Feraheme is used in the treatment of iron deficiency anemia in adult patients with chronic kidney disease. Although the company said that the rate of serious adverse events is in line with its packaging insert, it also found life-threatening and fatal events following a post-marketing study. Amag shares sank 25 percent on the news.

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