Novelion will slash an unknown number of jobs as it initiates “significant cost reduction plans.”
Following a disappointing 2017 that included an agreement to pay $40 million to resolve criminal charges against its subsidiary Aegerion, Canada-based Novelion Therapeutics Inc. will slash an unknown number of jobs as it initiates “significant cost reduction plans.”
In a brief announcement issued Wednesday, Novelion said it must continue to manage cash resources and the “effects of the delay and uncertainty of the settlement” Aegerion attempted to reach last year with the U.S. Department of Justice and the Securities and Exchange Commission.
Novelion Chairman of the Board Jason Aryeh said the company was forced to make difficult decisions given its current cash position and expectations for cash use in 2018. The company said the reprioritization will result in significant operating cost and workforce reductions that are estimated to lower operational expenses by approximately $18 million over the course of 2018. The company did not specify how many positions would be eliminated or when those cuts would begin.
“In addition to these cost cuts, we plan to review our capital structure in an attempt to leverage the flexibility in our corporate and capital structures. We believe that these initiatives are necessary to continue Novelion’s vital commitment to our patients. We express our sincere gratitude to the valued employees and families whose jobs were negatively impacted,” Aryeh said in a statement.
Not only is the company cutting positions, Novelion said it was also pursuing licensing opportunities for its drug candidate zuretinol, which is designed to treat certain rare inherited forms of blindness. Those opportunities are due, in part, to the cash and capital structure challenges, the company said.
Novelion and its subsidiary entered a deal to pay $35 million to resolve criminal and civil charges relating to its marketing of Juxtapid, a cholesterol drug that contains a black box warning. Juxtapid has been approved to treat patients with a rare genetic disease called homozygous familial hypercholesterolemia (HoFH). The government brought charges against Aegerion stating the company was urging prescribers to provide the drug to other high cholesterol patients who did not have HoFH. Between 2012 and 2015, the government said Aegerion pushed the drug as a treatment for high cholesterol. Additionally, the government charged that the company did not provide prescribers with information about the safety risks associated with the drug.
In September, the company agreed to pay a settlement of about $40 million, but it was rejected by U.S. District Judge William Young. In his ruling, Young said the plea deal “unduly hobbles” his duties as a judge by restricting his ability to impose a sentence, Reuters reported in November. Following that ruling, Novelion said it was “evaluating its options and next steps.”
