CAMBRIDGE, Mass.—If the news of Novartis cutting 1,900 jobs and Takeda making plans to get rid of 2,800 of its own wasn't enough dire news on the pharma and biotech employment front, Alnylam Pharmaceuticals Inc., aleading RNAi therapeutics company, announced that it intends toimplement a strategic corporate restructuring that includes an approximate33 percent reduction in its workforce.
As the company casts it, the move is designed to better align its resources "to focus onwhat it believes to be the company's highest value opportunities withaccelerated clinical development plans." These plans include a previouslyannounced company focus on its "Alnylam 5x15" RNAi therapeutic productstrategy with ALN-TTR for the treatment of transthyretin-mediatedamyloidosis (ATTR) and ALN-APC for the treatment of hemophilia as leadprograms and advancement of other pipeline programs with existingalliances and new partnerships.
"We have made remarkable progress in advancing RNAi therapeutics as anew class of innovative medicines, including recent resultsdemonstrating human proof of concept in our ALN-TTR program and clinicalefficacy for RNAi therapeutics in our ALN-PCS program," said Dr. JohnMaraganore, CEO of Alnylam. "As we effect ourongoing transformation from a platform company to a product company,now is the time to focus our near-term efforts and resources on what webelieve to be our highest value opportunities; specifically, acceleratedclinical development plans for our programs in transthyretin-mediatedamyloidosis and hemophilia, while advancing other pipeline programsthrough existing alliances and new partnerships that we aim to form inthe future."
Alnylam expects the reduction in personnel costs, along with otherexternal costs, to result in a savings of approximately $20 million in2012 cash operating expenses. Alnylam estimates that it will incurone-time restructuring costs of approximately $4 million includingemployee severance, benefits and related costs, which it expects toincur in the first quarter of 2012. The company recently increased itsyear-end 2011 cash guidance to approximately $260 million, and willprovide financial guidance for 2012 in connection with its 2011financial results announcement in February.
This comes just 16 months after Novartis, in bringing to a head an agreement that began with Alnylam in 2005, decided not to exercise a roughly $100 million intellectual property option. This announcement led to an Alnylam announcement of a corporaterestructuring that included a 25 percent to 30 percent reduction in overallworkforce, as a result of completing the fifth and final planned year ofthe Novartis alliance.
A post by Dirk Haussecker at the RNAi Therapeutics blog speculates that the most recent layoffs may be in expectation that litigation with Tekmira Pharmaceuticals Corp. over patents and possible profiting from misuse of trade secrets might prove costly, and he worries that "The cost-saving measuresand the new mantra of having transformed from a platform into aproduct-focused company is also at odds with the notion that Alnylamwants to remain at the forefront of RNAi therapeutics innovation."