Arena Pharma Slashes Workforce by 25 Percent: Biotech's Latest Tribulations

by: The Burrill Report

Arena Pharmaceuticals (NASDAQ:ARNA), stung by its inability to win regulatory approval for its experimental obesity drug lorcaserin, said it is slashing its workforce by 25 percent or 66 employees. The company expects to incur restructuring charges, primarily in the first quarter of 2011, of approximately $3.8 million in connection with one-time employee termination costs. Arena expects the reduction to decrease annualized cash expenditures by approximately $13.5 million. Arena will focus its resources on working to obtain regulatory approval of lorcaserin, seeking collaborators for the commercialization of lorcaserin outside of the United States and advancing select earlier-stage research and development programs independently or in partnership.

Elan (NYSE:ELN) laid off 130 people or about 10 percent of its workforce, according to Reuters. Most of the cuts came at the company’s R&D center in South San Francisco, California. About half of the positions eliminated are scientists. Elan did not publicly announce the cuts, but confirmed them to Reuters.

Abbott Laboratories (NYSE:ABT) said it would cut 1,900 jobs, or 6 percent, of its U.S. workforce following setbacks in its development pipeline that led to a restructuring, the Chicago Tribune reported. About 1,000 jobs in manufacturing operations in Illinois would be eliminated. The U.S. Food and Drug Administration recently raised concerns about the safety of the company’s experimental psoriasis drug for which the company was seeking approval. Abbott cited “the challenging regulatory environment” for the decision to cut jobs. The company said it could take charges of nearly $300 million over the next several quarters relating to cost reduction measures.

Sanofi-Aventis (NYSE:SNY) and its subsidiary BiPar Sciences said a BiPar experimental drug for metastatic triple-negative breast cancer failed to meet the endpoints for overall survival and progression free survival in a late-stage clinical trial. The company, however, said the results of a pre-specified analysis in patients treated in the second- and third-line setting demonstrate an improvement in overall survival and progression-free survival, consistent with what was seen in the mid-stage study. The overall safety analysis indicates that the addition of BiPar’s iniparib did not significantly add to the toxicity profile of gemcitabine and carboplatin. Sanofi plans to discuss the results with regulators in the United States and Europe in the near future.

The U.S. Food and Drug Administration notified GlaxoSmithKline (NYSE:GSK) that it would not approve its application to expand the approved use for its drug Avodart, based on presented data, to include reducing the risk of prostate cancer in men at increased risk for the disease. Avodart is approved for the treatment of symptomatic benign prostatic hyperplasia or BPH in men with an enlarged prostate to improve symptoms, reduce the risk of acute urinary retention, and reduce the risk of the need for BPH-related surgery. In combination with the alpha-blocker tamsulosin, Avodart is also approved for the treatment of symptomatic BPH in men with an enlarged prostate.

Actelion (OTCPK:ALIOF) and its partner GlaxoSmithKline said that they have discontinued clinical development of almorexant, a late-stage experimental treatment for sleep disorders. Almorexant is a dual orexin receptor antagonist. This decision came after a review of data from additional clinical studies, which were conducted to further establish the clinical profile of almorexant, including its tolerability. The two companies said they intend to conducting further research to better understand the potential of orexin receptor antagonism in sleep disorders and other indications and will both work on the discovery and development of new orexin receptor antagonist therapies based on the orexin alliance formed in July 2008.

Angiotech Pharmaceuticals (ANPI) said its board has authorized it to file for bankruptcy protection in Canada to eliminate $250 million of its debt. The Vancouver-based specialty pharma and medical device company said all of the existing shares will be canceled under the plan and existing shareholders or option holders will receive no compensation if the recapitalization is approved.