Restructuring Auxilium Pharmaceuticals Axes 30% Of Workforce
September 10, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Auxilium Pharmaceuticals , a specialty biopharmaceutical company headquartered in Chesterbrook, Penn., announced late Tuesday that it is restructuring its business in hopes of annual cost savings of more than $75 million. Included in those cuts is a reduction in the workforce by approximately 30 percent.
“Auxilium has faced significant challenges this year, in particular a dramatic decline in the testosterone replacement therapy market," said Adrian Adams, chief executive officer and president of Auxilium. "We are making difficult but necessary changes at the operational level to strengthen our balance sheet, reinforce our competitive position and, we believe, drive shareholder value.”
Auxilium is focused on urology, with a specific focus on men’s healthcare and orthopedics. Its men’s healthcare products are designed to treat Peyronie’s disease, erectile dysfunction and for treatment for low testosterone levels. Its orthopedics area ocuses on treating conditions caused by excessive collagen formation in the hands and other parts of the body.
In June Auxilium announced plans to merge with Canadian company QLT Inc. (QLTI). QLT focuses on the development of innovative orphan ophthalmology products. The combined organization is led by Auxilium’s current leadership team and is headquartered in Chesterbrook.
QLT has a synthetic retinoid program under development for treatment of retinal diseases, such as Leber Congenital Amaurosis (LCA) or Retinitis Pigmentosa (RP). The program is approaching Phase 3 development.
As part of its restructuring, Auxilium plans to consolidate three sales forces into two. It will focus its R&D programs on cellulite and Frozen Shoulder Syndrome, and work on making their manufacturing and inventory processes more efficient. In late August the company announced positive results from a Phase 2a clinical trial of collagenase clostridium histolyticum (CCH) for the treatment of edematous fibrosclerotic panniculopathy (EFP), more commonly known as cellulite. The study involved 150 women between the ages of 18 and 45 in the U.S. Each received up to three treatments of the drug or a placebo. Both mid- and high-dose recipients of the drug showed statistically significant improvement.
The company plans to complete most of the restructuring by year-end of 2014 with the $75 million in savings showing by mid-year 2015. Auxilium expects the restructuring will incur costs of up to $20 million, mostly related to severance and contract-related expenses.