Alexion scraps R&D programs, lays off staff after setbacks

Soliris
A vial of Alexion's Soliris

Alexion Pharmaceuticals is set to lay off 7% of its staff and scrap some R&D programs to restructure its business following a tricky period. The move sees the recently appointed interim CEO-CFO team stamp their mark on a biotech that is coming off the back of R&D setbacks and an internal probe into fraud allegations.

With Alexion having a 3,000-plus workforce at the last count, the restructuring, news of which was broken by Bloomberg and confirmed by Reuters, is set to cost approximately 200 people their jobs. Alexion has yet to say whether some units will bear the brunt of the company-wide restructuring, or disclose exactly where the ax will fall on its R&D programs. The company may provide more details when it discusses its first-quarter results.

Alexion has been more forthcoming about the pipeline prospects it will focus its attention on after its has finished the restructuring. Talking to analysts at Barclays, Alexion picked out development of longer-acting anti-C5 antibody ALXN1210 in paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome—the indications in which Soliris is approved—and cancer asset samalizumab as two of its priorities. Alexion also remains focused on developing Soliris for use in neuromyelitis optica and myasthenia gravis.

Absent from the list is SBC-103, the drug Alexion acquired in its $8.4 billion takeover of Synageva. Alexion took an $85 million impairment charge against the candidate and revealed it isn’t planning any further studies around the turn of the year.

News of the setback to SBC-103 emerged in a period in which then-CEO David Hallal and CFO Vikas Sinha left and the company began an internal probe into fraud allegations. These issues, coupled to worries that Soliris will one day cease to be a cash cow, have driven down Alexion’s stock by 10% over the past year.

“Given the recent management change and conservative guidance, we are not surprised that the company is planning on optimizing its workforce and reevaluating some R&D programs. In speaking with the company, this restructuring was planned and incorporated in 2017 guidance provided on the 4Q16 earnings call,” Barclays analyst Geoff Meacham, Ph.D., wrote in a note to investors.