|Ariad Pharmaceuticals CEO Harvey Berger|
Ariad Pharmaceuticals ($ARIA) is letting go of nearly half its U.S. staff just a week after pulling its leukemia drug Iclusig from the market at the FDA's request, an unsurprising next step in what has been a monthlong downward spiral for the Massachusetts biotech.
The company said it's laying off 160 U.S. workers across its R&D and marketing departments in a move to save about $26 million by the end of next year. Ariad's European operation will go unscathed, and the company will employ 295 people around the world once its stateside downsizing is complete.
"This reduction in our workforce is a very painful and difficult action in which we are losing highly talented and dedicated employees, many of whom have worked for Ariad for a number of years, but it is a necessary step in strengthening the company financially," CEO Harvey Berger said in a statement. "I would like to personally express my deep gratitude to all of the employees affected by this reduction and thank them for their contributions to both the company and the cancer patients whom we continue to seek to help."
The job cuts are Ariad's latest effort to preserve what value it can as its sole revenue source sits on the shelf amid toxicity worries. The company's shares have dropped a galling 87% since Oct. 8, when the FDA imposed a hold on a study of Iclusig after investigators charted an alarming rate of blood clot development among patients in the treatment arm, dipping again when Ariad eventually pulled the plug on the trial. Last week, Ariad finally yanked the drug from the market, all the while adopting a poison-pill plan to ward off any would-be takeover schemes.
The company has said it will work with the FDA to get Iclusig back in business as soon as possible, but, pointing to the history of drugs pulled from the market, analysts figure it'll take at least a year, and Leerink Swann's Howard Liang believes there's a good chance Iclusig has made its last dime in the U.S.
Iclusig is still on the market in Europe, but it may soon ship with a stronger boxed warning. After a review of the clotting risks associated with the drug, the European Medicines Agency's pharmacovigilance committee is recommending a label update, advising physicians to keep a close eye on Iclusig patients if they choose to keep using the drug. The EMA's Committee for Medicinal Products for Human Use will review that advice and issue a ruling later this month, according to the agency.
- read the announcement
- here's the EMA statement