Lundbeck to Revamp R&D Strategy and Eliminate Up to 160 Jobs
On Tuesday, global pharmaceutical company Lundbeck announced that it is making changes to its research and development initiative, which could lead to a reduction of up to 160 positions. Lundbeck stated that it is optimizing its research and development organization to strengthen and advance its pipeline.
This plan falls in line with Lundbeck’s “Expand and Invest to Grow” strategy of expanding the company’s operating space and rebuilding its pipeline of potential treatments for brain disorders. Key elements of the plan include research and development efforts where the science is “most promising” and Lundbeck has expertise.
“The proposed changes will allow us to fully execute on our strategy in the years to come and rebuild our pipeline with innovative programs with strong potential to deliver highly impactful treatments for patients with brain disorders. Through this we will support Lundbeck in becoming the premier neuroscience company, globally,” said Johan Luthman, Executive Vice President, R&D at Lundbeck.
Between 130 and 160 positions are expected to be eliminated, with 100 of them being in Denmark. Lundbeck has already informed the company’s Works Council, as well as its European Works Council.
This is not the only biopharmaceutical company to announce a reduction in staff as of late. Massachusetts-based AMAG Pharmaceuticals made headlines back in May when it revealed that it would be reducing its workforce by about 30%, or 140 positions.
At the time, the company also reported $68.7 million in total revenue for the quarter, including $44.4 million from sales of Feraheme and $21.8 million from Makena. AMAG Pharmaceuticals had an operating loss of $19.6 million.
“We are sharpening our focus on our priorities of maximizing Feraheme’s value, retaining patient access to Makena and continuing to efficiently develop innovative therapies, namely ciraparantag,” said Scott Myers, president and chief executive officer of AMAG. “As we look to the future, it is difficult to estimate the severity and duration of the COVID-19 pandemic. We’ve seen signs of stabilization and remain confident in the underlying demand for our products; however, we cannot speculate on the subsequent speed of recovery and the overall impact on our business.”
In May, Orchard Therapeutics also announced a new strategic plan that would shift its clinical focus, shutter a proposed manufacturing facility, and reduce its staff by 25%. Instead of focusing on stem cell gene therapy for the treatment of rare conditions, Orchard stated that it will now look at more common conditions, such as Crohn’s disease.
“I feel privileged to lead Orchard as we embark on this new chapter, which is rooted in fulfilling the powerful possibilities for HSC gene therapies beyond ultra-rare diseases,” said Chief Scientific Officer Bobby Gaspar. “Moving forward, we are focusing on advancing therapies for high need and high-value diseases, and our work in neurometabolic disorders is a clear example of this. We’re also excited to announce new research programs which we believe will demonstrate the breadth of the HSC platform approach.”
The proposed manufacturing facility that has now been shuttered was first announced back in 2018, and was going to be constructed in Fremont, Calif. By reducing its staff by 25%, Orchard will save approximately $125 million through the end of 2021. This will extend its existing cash runway into 2022.
Cash, cash equivalents, and investments as of March 31, were $263.9 million compared to $325.0 million as of Dec. 31, 2019.