Astellas to halt work at R&D subsidiary amid restructuring plan

Astellas Pharma has begun restructuring its operations, with plans to discontinue all work at Astellas Research Technologies, its R&D subsidiary of about 200 employees, by March 31, 2019.

The company is offering an early retirement incentive program that it estimates will cut 600 staff altogether, in the face of exclusivity losses in major products that is expected to cause a drop in 2019 operating profits.

Activities at its sales and marketing company will also be discontinued by next March, the close of the current Japanese fiscal year, as will a majority of the work at its human resources arm. Meanwhile, Astellas’ CMC and analysis laboratories will be sold off, to the contract research organization Eurofins Pharma Services.

The cutbacks and reshuffling are part of an overhaul led by Astellas’ new president and CEO, Kenji Yasukawa, who took the helm April 1. Yasukawa previously served as the company’s chief strategy officer and chief commercial officer.

In a briefing call with investors, Yasukawa said the company’s ratio of external to internal innovation would roughly be maintained at the levels following a major 2013 restructuring which saw the closure of labs at two U.S. subsidiaries and the narrowing of research at its U.S. institute to CNS diseases. Astellas also closed an Osaka facility at the time, relocating its work elsewhere.

The company’s strategic plan includes eight research focus areas, starting with the development of cell therapies and regenerative medicine in ophthalmology. Targeting eye diseases that cause blindness offers certain research benefits, such as a relatively closed organ system compared to the rest of the body, with a low chance of immune system response, as well as a relatively small number of cells needed per dose.

Other areas include muscle diseases, immunology and oncology, including plans to maximize the value of Xtandi, which it shares with Pfizer. Astellas hopes to expand Xtandi’s indications in first-line treatment of nonmetastatic and metastatic prostate cancer, as well as a second- or third-line therapy in nonmetastatic castration-resistant disease over the next decade.

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Several Big Pharma companies have slimmed down or reorganized their R&D operations in the past year, including Bristol-Myers Squibb, Pfizer and Amgen.

BMS let go over 100 staffers in February—following a year of waves of layoffs and the planned closure of its facility in Wallingford, Connecticut—as the company moves toward a more hub-focused R&D model.

Before that, Pfizer announced it would cut 300 neuroscience jobs, alongside eight early-stage projects in its pipeline, including those in epilepsy, Parkinson’s and Alzheimer’s diseases.

Meanwhile, Amgen said it would lay off 200 of its R&D staff in November 2017, mainly at facilities in California. Previous restructurings at the company aimed to reduce headcount by between 12% and 15%.