GENMAB REORGANIZES TO BUILD SUSTAINABLE BUSINESS
Manufacturing Facility to be Sold and Headcount Reduced
Copenhagen, Denmark; November 5, 2009 - Genmab A/S (OMX: GEN) announced today that it is planning to reorganize to build a sustainable business that will match resources with workload now and in the future. As part of this strategy the company intends to sell its manufacturing facility located in Brooklyn Park, Minnesota, USA. The proposed sale comes alongside a decision to structure the workforce to match ongoing and future needs and reduce headcount by approximately 300 positions. The annualized impact of the reorganization is estimated to yield savings of approximately DKK 300 million, including non-cash items of approximately DKK 60 million.
Genmab will focus on innovation and continue to create new antibodies with the potential to treat cancer. The company does not intend to discontinue any of its ongoing development programs as a result of this reorganization and looks forward to data from the zalutumumab pivotal study in head and neck cancer, now expected in 2010, as overall patient survival is longer than anticipated.
Genmab contemplates reducing staff across its international locations in an effort to match its workload to the resources needed to carry them out and to work in as cost effective a manner as possible. The workload for Genmab's development employees, in particular, has decreased and is expected to remain low as partners take on increasing responsibility for upcoming studies. Genmab will adopt a more flexible model based on contracts with vendors to address varying demand for clinical development work going forward.
As part of the strategy to build a more flexible model Genmab's future manufacturing requirements will also be met through working with contract manufacturing vendors. The manufacturing environment has changed as contract manufacturing resources in the industry have become more available. This comes at a time when Genmab is anticipating limited short-term internal demand. The Brooklyn Park facility, which is ready for sale, will operate on a maintenance-only mode with a small staff, until a sale is agreed.
These decisions have a material effect on this year's guidance, which will be detailed in a separate stock exchange release (no. 42/2009).
"It is vital that we refocus our energies on what Genmab is best at and what the pharmaceutical industry needs most - innovation," said Lisa N. Drakeman, Ph.D., Chief Executive Officer of Genmab. "The challenging demands on our industry require Genmab to take a hard look at our organization and continue to prioritize spending. I would like to reiterate our gratitude for the achievements of all our staff, not least in the recent approval for Arzerra, and that we remain committed to supporting all the staff who are affected."
Conference Call
Genmab will hold a conference call to discuss today's news today at:
4:30 pm CET
3:30 pm BST
10:30 am EST
The conference call will be held in English.
The dial in numbers are as follows:
+1 888-549-7750 (in the US) and provide conference ID number 4181672
+1 480-629-9866 (outside the US) and provide conference ID number 4181672
A live and archived webcast of the call will be available at www.genmab.com.