Difficult Decisions, Strategic Streamlining Lead to Workforce Reductions


Mergers and acquisitions are a well-known fact in the life sciences industry, and anyone working within the sector knows to expect them at any time. But when they come at Christmastime on the heels of a deadly global pandemic that has triggered the worst financial crisis since 2008, they only add insult to injury.

Just a little over a month ago, after acquiring longtime collaboration partner BioSpecifics Technologies Corporation, Endo Internationalannounced that it would be phasing out approximately 560 jobs in the U.S. by the first half of 2023. Endo said that the anticipated closures, which include two manufacturing sites in California and New York, are part of a restructuring effort to further optimize the company's operations, increase overall efficiency, expand its pipeline and support the planned 2021 launch of Qwo, the first injective to be approved by the U.S. Food and Drug Administration (FDA) as a treatment for cellulite. 

Last week, two more companies announced decisions that, for various strategic reasons, will lead to layoffs.    

Mylan Moving On:

A West Virginia town called Morgantown is being hit hard by a planned 20% staffing reduction by global generics giant Mylan Pharmaceuticalsas part of a larger restructuring strategy by Viatris, the company which resulted from Mylan’s November merger with Pfizer Inc.’s Upjohn unit.

Viatris announced Friday that The Chestnut Ridge oral solid dose manufacturing facility, which has been a part of the town’s fabric since 1965, will shut down by mid-summer in 2021.

“The news that Viatris will be closing its manufacturing facility in Morgantown next year is extremely disappointing, all the more so given the company’s long history in West Virginia,” said West Virginia Congressman David McKinley (R), whose district includes the area.

“Mike Puskar started Mylan from nothing and grew it to be a global leader. The Morgantown facility has been part of that heritage from nearly the beginning.  At a time when we should be focusing on bringing manufacturing to America and securing our domestic pharmaceutical supply chain, this decision is a reminder of the challenges we face. Our thoughts are with the families of the 1,500 workers who will be impacted. We will do everything we can to help them through this difficult time.”

The move is part of a larger Viatris strategy targeting at least $1 billion in cost synergies to be reached by the end of 2024 or sooner. Viatris currently employs around 45,000 employees, and the layoffs, which include four other plants across offices in Ireland, Puerto Rico and India, could potentially total 9,000.

"Wherever feasible, Viatris will seek to find potential buyers for its facilities in order to preserve as many jobs as possible and will work with impacted communities to identify appropriate potential alternatives," the company said in a statement on Friday. 

Savara Streamlines Pipeline

Then there are times when projects, and often jobs, are eliminated due to the high-stakes nature of the scientific discovery process. Sometimes a company will win big when the research pans out. Think BioNTech, a company few in the general public had heard of before 2020, whose stock skyrocketed 24% the day after its vaccine, co-developed with Pfizer, proved 90% effective in first interim analysis from its Phase III study.

Then, there are situations like the one in which Texas-based Savara Pharmaceuticals, a biopharma company developing therapies for orphan lung diseases, currently finds itself.

Savara is taking the axe to a significant portion of its pipeline after announcing on December 10 that one of its investigational drugs, AeroVanc, missed its primary endpoint in Phase III.

Development of AeroVanc, a vancomycin hydrochloride inhalation powder that had been under development for the treatment of cystic fibrosis patients with methicillin-resistant Staphylococcus aureus lung infection, will be discontinued.

Results from the Phase III AVAIL trial showed that AeroVanc had failed to meet the primary endpoint of mean absolute change from baseline in FEV(forced expiratory volume) percent predicted analyzed sequentially at week 4 (end of cycle 1), week 12 (end of cycle 2), and week 20 (end of cycle 3). 

Apulmiq, an inhaled Ciprofloxacin, which had been in development for the treatment of non-cystic fibrosis bronchiectasis (NCFB), will also be terminated as part of the streamlined strategy.

The company will now pin all of its hopes and resources on Molgradex, a therapy for autoimmune pulmonary alveolar proteinosis (aPAP), that has experienced bumps of its own.

Molgradex, an inhaled formulation of recombinant human granulocyte-macrophage colony-stimulating factor (GM-CSF), failed to meet the primary endpoint in a pivotal Phase III clinical study in June of 2019. 

Despite this, the Food and Drug Administration (FDA) had enough faith in the therapy’s potential to grant Molgradex Breakthrough Therapy designation for the treatment of aPAP. The designation was granted based on data from the first IMPALA pivotal trial.

Savara said that its leadership and business operations will be aligned to devote increased resources to Molgradex in aPAP, which is expected to head into a much-anticipated Phase III IMPALA 2 trial across North America, Europe, and Asia in Q2, 2021 – a date pushed back from Q1 due to delays associated with COVID-19. 

Savara will reduce overall operating expenses, which includes a reduction in its workforce.

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