Mary Szela, the new CEO at Cambridge, MA-based Aegerion ($AEGR), has reached for the budget ax to help compensate for the rising tide of competition that has challenged its cholesterol drug Juxtapid. The company announced today that it is chopping about 25% of its staff--roughly 80 workers--as it whittles its roster of employees down to 230.
Szela stepped in to take the helm just before the J.P. Morgan conference in January, taking the reins from an interim chief after Marc Beer found himself in the cross hairs of activist investor Alex Denner, who started agitating for change at the top after Beer ran afoul of regulators with his unsubstantiated claims about the health benefits offered by Juxtapid.
Juxtapid is approved to treat rare cases of homozygous familial hypercholesterolemia (HoFH), but while it's proved effective in removing cholesterol, there's been no evidence of a reduction in deaths and heart attacks, as he had stated. In the meantime, the big PCSK9 drugs have arrived on the market to challenge little Aegerion's franchise drug, while lomitapide sales never lived up to expectations.
A messy divorce case that cited Beer's drug use--something he denied--didn't help.
Szela, who left Melinta last fall, plans to put new programs into the pipeline for rare diseases, following a strategy that has proven to be very popular at biotechs like BioMarin.
Reorganizing the company and bringing in new senior staffers was step one for Szela. Going forward, the focus at the company will be on dealmaking, looking for Phase I through Phase III drugs that would fit into the company, Szela tells me this morning.
"A late-stage agent would be particularly impactful," says the CEO, who readily confirms that she came into her job with some specific programs in mind. And she adds that "we need to think about long-term sustainability. There are a number of areas where we would partner much earlier." And deals could range from acquisitions and licensing to collaborations.
"All of the above," says Szela, who's keeping details like who she talking to and how much the company is prepared to spend to herself for now.
The staff layoffs, which will be completed by the end of the second quarter, are expected to cut across all departments in the biotech.
"We believe this action better aligns the Company's resources with our current strategy and market opportunity for Juxtapid and our goal of continuing to grow Myalept (metreleptin for injection) sales, supports our objective to create a pipeline of therapies to treat patients with rare diseases, and positions us to maximize the value of our assets for our shareholders," Szela noted in a statement.
- here's the release