Achillion is handing out pink slips to 20 percent of its employees and initiating an operational restructuring plan.
Five months after Janssen Pharmaceutical Inc. walked away from a multi-billion dollar development deal with Achillion Pharmaceuticals, Inc. for hepatitis C treatment combination JNJ-4178 the Connecticut-based company is slashing staff and initiating an operational restructuring plan.
Under the restructuring plan, Achillion will hand out pink slips to 20 percent of its employees, bringing it down to about 70 workers in total. The plan is expected to save Achillion about $10 million in 2018, which are over the 2017 expense levels, the company said. In a statement issued this morning, the company said the restructuring is meant to focus the company’s remaining resources on advancing Achillion’s existing clinical and late-stage preclinical factor D inhibitors and reduce expenses to maintain a strong balance sheet.
Achillion’s lead drug is ACH-4471. It is currently in Phase II development as treatments for C3 glomerulopathy and paroxysmal nocturnal hemoglobinuria. In December the U.S. Food and Drug Administration granted Orphan Drug Status to ACH-4471 for the treatment of patients with C3 glomerulopathy. The Phase II trial is expected to read out later this year.
Also in December Achillion initiated dosing Phase 1 trial of ACH-5228, a next-generation, oral small-molecule factor D inhibitor.
“We are focused on executing against our 2018 strategic objectives with the goal of delivering transformative therapies to patients. We believe the operational expertise that Joe brings to his new role will strengthen our capabilities to achieve those objectives. While it is difficult to undertake a restructuring, we believe through efficient use of our capital, we will have the potential to build significant value in our Factor D inhibitor portfolio,” Achillion Chief Executive Officer Milind Deshpande said in a statement.
In September Janssen, a division of healthcare giant Johnson & Johnson Family of Companies halted its HCV development deal with Achillion. Janssen said going forward it intended to focus its efforts on developing treatments for hepatitis B, which affects more than a quarter of a billion people globally. Lawrence Blatt, Janssen’s head of Infectious Disease Therapeutics, said in September that Janssen’s R&D efforts will be focused on “areas of greatest unmet medical need.” Janssen’s decision to close out its HCV investments were certainly influenced by existing medicines on the market from companies like Gilead Sciences, Inc. and AbbVie that virtually cure the disease.
In addition to its restructuring, Achillion announced that Joseph Truitt was promoted to the role of company president and chief operating officer. Although the company is experiencing growing pains following the Janssen decision and the job cuts, Truitt put a positive spin on things by touting Achillion’s expertise in complement alternative pathway (AP) research. He said he looks forward to delivering additional data on the company’s lead program ACH-4471later this year.
“I am particularly enthusiastic about our work in C3G where our market research has shed light on the underserved needs of these patients who have a debilitating disease that is believed to be caused by an overactive AP. C3G affects at least 8,000 people in the United States and the major European markets, specifically France, Germany, Italy, Spain and the United Kingdom, and there are no approved treatments,” Truitt said.
