Life Science Weekly inSite (Oct. 17 - 23)
Published: Oct 24, 2008
A weekly round-up of biotech’s top stories from around the world
By Suvarna Bhatt, Feature Editor
The top biotech story this week was Merck's announcement on Wednesday that it will cut 12 percent of its workforce. This news comes one month after the company announced it will more than halve the number of sales offices nationwide as a part of a global strategic review in an effort to cut costs. While earnings of other major biotech players like Bristol-Myers and Amgen are reported positive, Merck's third-quarter net profit fell 28 percent and shares were off target more than 3 percent. Sixty percent of the job cuts will be overseas affecting those in sales, marketing, manufacturing, administration and research. Three basic research centers will be closed, in Seattle, Japan and Italy. This marks Merck's second major restructuring in less than three years.
The second major story this week in the biotech world was that Swiss drug company, Roche Holding AG confirmed its $43.7 billion bid for the rest of Genentech Inc. The company reported a 2 percent fall in nine-month sales to $29.26 billion. Roche offered to buy Genentech for $89 per share for the 44 percent of the company it doesn’t own back in July, but the offer was rejected. Roche currently owns 56 percent of Genentech.
Novartis made big news on Monday when it announced slashing 550 U.S. sales jobs as part of a reorganization of its operations and announced management changes, appointing vaccines chief Joerg Reinhardt as chief operating officer, a new position created within the organization. The Swiss company said net profit rose 32 percent to $2.08 billion in the third quarter, helped by strong sales of top-selling blood pressure medicine Diovan, and raised its full-year drug sales forecast.
While Novartis was cutting jobs, Fibrogen announced on Monday that it will bring jobs to the San-Francisco Mission Bay District. The company will move its 250 employees from South San Francisco to the new life sciences hub which will also be home to Pfizer Inc. in early in 2010.
Maxygen Inc. announced on Thursday that it plans to cut nearly 30 percent of its workforce and delay late-stage manufacturing of MAXY-G34, its drug for a chemotherapy-induced blood disorder. The company said it will hold-off on manufacturing the drug until it finds a partner who can share costs.
Exelixis ended its six-year collaboration with GlaxoSmithKline to discover and develop oncology compounds on Thursday. Glaxo decided not to exercise its option to license any further compounds under the program. Exelixis retains the rights to develop, commercialize, and license all of the compounds in the program, subject to paying Glaxo a 3 percent royalty on net sales of any product that incorporates the compound XL184.
There was news of growth this week with the launch of a new company called Archer Pharmaceuticals, Inc. The company will use modern technologies for the identification of novel treatments for Alzheimer's disease. Archer has several compounds ready to enter clinical development, including ARC029 and ARC031. Both are targeted at the reduction of soluble amyloid proteins in the brain, which are thought to be responsible for the degeneration of neurons that occurs with patients with Alzheimer's disease. Several other agents in the preclinical stage are also in the pipeline.
Predictive Physiology & Medicine announced last Friday the company plans to expand its operations in Indiana which will create more than 75 new jobs by 2010. The blood analysis company spun off as a private company by Indiana University three years ago. The company uses the next generation of blood tests to create a predictive analysis of an individual’s health. The company will invest more than $10.6 million to locate its headquarters and laboratory.
Nektar Therapeutics also made the top news count this week when it announced Novartis AG agreed to acquire specific pulmonary delivery assets, technology, and intellectual property for $115 million in cash. After announcing job cuts on Monday, the Swiss company said on Tuesday about 140 Nektar staff would join Novartis. According to Novartis, the buy will help accelerate drug development for chronic obstructive pulmonary disease, asthma and cystic fibrosis.
Genzyme Corporation made top news at the end of last week when the U.S. FDA raised questions about whether Myozyme, Genzyme’s drug to treat Pompe disease required more data on long term exposure before approval. A U.S. advisory panel said on Tuesday this week that the drug should be approved as long as further studies are carried out.
That’s it for this week's leading biotech news from the BioSpace news desk…stay tuned for the following week’s top movers and shakers…