As Baxalta-Shire Merger Grinds to a Close, Baxalta Lays Off 239 in California
March 4, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Bannockburn, Ill.-based Baxalta filed with the state of California that it will be laying off 239 people as of May 1.
According to the Pacific Coast Business Times, Baxalta will lay off 100 people at its offices in Thousand Oaks, Calif, and about 130 at its offices in Los Angeles and Van Nuys. Although those layoffs will begin May 1 at those three locations, additional layoffs are expected to occur at the Los Angeles location on July 2 and Oct. 15.
Baxalta spun off from Baxter International on July 1, 2015. Shortly afterwards, Dublin-based Shire (SHPGY) made a bid for the company, but was rebuffed repeatedly.
Finally, on Jan. 11, 2016, Baxalta agreed to the acquisition for a deal valued at about $32 billion. Baxalta shareholders will receive $18 in cash for each share and 0.1482 of Shire ’s American depository receipts.
“This proposed combination allows us to realize our vision of building the leading biotechnology company focused on rare diseases,” said Flemming Ornskov, Shire’s chief executive officer, in a statement in January. “Together, we will have leadership positions in multiple, high-value franchises and become the clear partner of choice in rare diseases. Our expanded portfolio and presence in more than 100 countries will drive our growth to over $20 billion in anticipated annual revenues by 2020. Our due diligence has reinforced our belief in the combination, and we look forward to welcoming Baxalta colleagues to a shared entrepreneurial, patient-driven culture.”
A spokesperson for Baxalta, Geoffrey Mogilner, indicated to several media outlets that the current layoffs were not related to the merger. However, a Jan. 11 news release said, “These annual cost synergies will be achieved by increasing efficiencies, leveraging the scale of combined businesses, aligning to Shire’s lean operating model and optimizing the combined (Research and Development) portfolio.”
It would not be unusual for layoffs to occur after a merger due to strategy changes and overlapping positions. Scott Mitnick, city manager of Thousand Oaks, told the Business Times that Baxalta’s facilities at Westlake Village were already starting to scale back production.
Baxalta also announced today that it had dosed the first patient in its Phase I clinical trial of BAX 826, a recombinant Factor VIII (rFVIII) treatment for hemophilia A.
“This is an important step in evolving extended half-life treatments as we aim to improve bleed protection for hemophilia A patients while potentially offering once-weekly dosing,” said John Orloff, head of research and development and chief scientific officer of Baxalta, in a statement. “Baxalta is dedicated to advancing innovative research on the principle of direct factor replacement, a proven treatment model, to support as many patients as possible.”
In addition, earlier this week the company announced it had submitted a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for ADYNOVI, an extended circulating half-life recombinant Factor VIII (rFVIII) for pediatric, adolescent and adult patients with hemophilia A and for use during surgery. It is licensed in the U.S. as Adynovate and is under regulatory review in Japan, Canada and Switzerland.
“We are dedicated to bringing ADYNOVI to hemophilia A patients all over the world,” said Brian Goff, executive vice president and president, Hematology, of Baxalta, in a statement. “As we build on our market-leading portfolio of direct factor replacement treatments, we continually bring new options to hemophilia patients, empowering them to manage their hemophilia, with their caregivers, in the way that works best for them.”