Genmab sheds staff and shutters US plant
pharmafile | November 10, 2009 | News story | Manufacturing and Production |Â Â GenmabÂ
Danish biotechnology company Genmab has put a manufacturing facility in the US up for sale and cut 300 staff – mainly in development – as part of a major restructuring exercise aimed at reducing ongoing costs.
Genmab said the decision to close the plant stemmed mainly from the greater availability of contract manufacturing options that make operating in-house production less attractive, particularly as the company is currently "anticipating limited short-term demand".
The company expects to save around 300 million kroner ($60 million) from the exercise, including around 60 million kroner in on-cash items.
"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," said Genmab in a statement.
News of staff reductions and plant closures often follows pipeline disappointments at biotech companies, but in this case Genmab recently won US approval for its first antibody product, Arzerra (ofatumumab) for chronic lymphocytic leukaemia.
The company has also announced the start of a phase III trial of ofatumumab versus Genentech and Biogen Idec's Rituxan (rituximab) in patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL), and stressed that it will not drop any of its R&D projects as a result of the cutbacks.
The facility coming under the hammer is based in Brooklyn Park, Minnesota, and was bought in March 2008 from PDL BioPharma for $240 million. Genmab chief executive Lisa Drakeman said on a conference call that Genmab is hoping to get around $150 million for the facility.
Local press reports have indicated that 130 staff will be affected by the site closure, with the remainder of the job losses coming manly from the UK and Denmark.
The Danish company said it expects to take a charge of around 38 million kroner in 2009 and 67 million kroner in 2010 as a result of the job cuts, plus an 83 million kroner impairment charge related to the site closure.
Genmab has also updated its 2009 revenue guidance, saying it expects to book around $126 million – down from an earlier estimate of $148 million – due to the deferment of a milestone payment from Arzerra partner GlaxoSmithKline from 2009 to 2010.
The company now expects to post an operating loss of $228 million, ahead of its earlier estimate of $130 million.
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