Biogen Idec plans to reduce its work force by 17 percent and divest certain assets, including its psoriasis drug, Amevive, to funnel more money into its development pipeline.

The move is intended to cut annual operating expenses between $200 million and $300 million, while boosting external business development activities, such as partnerships, collaborations and acquisitions, said Jose Juves, spokesman for the Cambridge, Mass.-based company, adding that the restructuring plan followed a "broad analysis" of its assets.

"There were areas within the company that we felt were really not providing long-term value," he said. "We also did an analysis of our external value and acknowledged that there are a lot of opportunities outside the four walls of Biogen Idec."

By the end of the year, the company will cut 650 of its 4,000 jobs worldwide. Employees will be given two months notice, Juves said, and a number of those will be gone within the next couple of weeks.

The company expects a pre-tax charge of $30 million to $40 million related to the lay-offs.

The company's stock was downgraded to "hold" by New York-based Citigroup following the news. Thomas Weisel Partners, also of New York, downgraded the company to "underperform," and First Albany also cut its rating from "buy" to "neutral."

Shares of Biogen Idec (NASDAQ:BIIB) closed at $41.86 Friday, down 58 cents.

In addition to cutting staff, Biogen Idec is looking at selling its NICO clinical manufacturing facility in San Diego and property in Oceanside, Calif. Earlier this year, the company sold to South San Francisco-based Genentech Inc. for $408 million its 60-acre biologics manufacturing plant in Oceanside, that had been designed to produce its multiple sclerosis drug, Tysabri, voluntarily withdrawn from the market due to safety issues. (See BioWorld Today, June 20, 2005.)

Biogen Idec also is seeking a purchaser for the global rights to Amevive (alefacept), which recorded revenues of $12.5 million for the second quarter. The product is approved for moderate to severe psoriasis.

"We believe it has a lot of potential," Juves said, "but it would be better suited for a company with more of a dermatology infrastructure."

Much of Biogen Idec's recent work has been the development and promotion of its two top-selling drugs - Avonex (interferon beta-1a) for multiple sclerosis and Rituxan (rituximab) for certain B-cell non-Hodgkin's lymphomas - as well as the ongoing safety evaluations of Tysabri (natalizumab), expected to conclude soon. For the quarter ending June 30, Avonex recorded revenues of $381.8 million. Rituxan, which also has been submitted for approval in rheumatoid arthritis, netted U.S. sales of $450 million last quarter. Rituxan is co-promoted with Genentech.

The company also awaits approval of Panaclar, formally called BG-12, to treat psoriasis patients in Germany.

"As far as the timing for this decision," Juves said, it is being completed while the company "is in a position of strength."

Biogen Idec reported net income of $34.5 million for the second quarter. As of June 30, the company had about $927.5 million in cash, cash equivalents and short-term investments.

"What we're doing now is an effort to position Biogen Idec for the years 2010 or 2015," Juves told BioWorld Today. "It will provide us with economic flexibility" and "allow us to pursue some research opportunities, even reaching out to academic institutions."

The company will focus on bulking up its pipeline, with products in different stages of development, he added. "We'll be looking up and down the development chain."

Early last month, Biogen Idec entered a three-product deal with Fremont, Calif.-based Protein Design Labs Inc., gaining access to three Phase II compounds in exchange for a $40 million up-front fee and the purchase of $100 in PDL equity, as well as up to $660 million in milestones. That collaboration involves a multiple sclerosis drug, a cancer drug and a drug for the treatment of autoimmune disorders and other indications. (See BioWorld Today, Aug. 4, 2005.)

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