A Medical Device Daily
Elan (Dublin, Ireland) reported that, as part of its ongoing efforts to manage its overall cost base and direct additional investment toward its promising and late stage pipeline, it will refine its business operations and functions to realize greater efficiencies and deepen its commitment and focus to key and strategic areas.
Elan will continue to have two related but distinct operating divisions: Biopharmaceuticals and Drug Technologies.
These adjustments, largely driven by changes in the Biopharmaceuticals business, will result in a reduction in Elan's global workforce of nearly 230 positions, or 14% of the company's total workforce.
In Ireland, where Elan's biological manufacturing and related fill finish activities are based, about 115 positions will be impacted.
Another 115 positions will be affected in the U.S., mainly in the areas of research, clinical development, biopharmaceutical development, and related corporate support and administrative services.
Elan said it expects to reassess the opportunity to invest in a biologics manufacturing facility and restart its related fill finish activities after the company has had the opportunity to evaluate the data from the Phase III trials of bapineuzumab in Alzheimer's disease.
Specific adjustments include a postponement of biologics manufacturing activities, a strategic redesign and realignment of the R&D organization within the Biopharmaceutical business, and a reduction in related G&A and other support activities. These changes follow the realignment of components of Elan's commercial organization in late 2008.
Elan expects that the financial benefits of these adjustments, some of which will be re-invested in the advancement of the clinical development of its pipeline, will reduce operating expenses in 2009 by $30 to $35 million and by nearly $50 million in a full year. Severance and related charges are expected to be $15 million and will be recorded as a charge in the first half of 2009.
Following these planned changes, Elan reiterates its financial guidance for 2009 and expects revenue to grow by double digit percentages, to be adjusted EBITDA profitable for the year, and to end the year with cash and investment balances in the range of $200 million.