Several employees at three biopharma firms are not having a very good week, as Zealand Pharma, Merck and Orchard Therapeutics all announced job cuts.
Several employees at three biopharma firms are not having a very good week, as Zealand Pharma, Merck and Orchard Therapeutics all announced job cuts.
Denmark-headquartered Zealand Pharma announced that it is laying off 90% of its staff in the U.S. by the third quarter of 2022 as part of a huge corporate restructuring move to pursue more robust partnerships.
The company intends to reduce expenses in non-core departments and pour more investment into research and development programs related to its peptide platform. Over 20 of the drug candidates Zealand has invented have advanced into clinical development stages, two of which are already on the market and three in late-stage development. The company also has ongoing licensing deals with AstraZeneca and Boehringer Ingelheim to further advance therapy research and creation for patients who might benefit from peptide-based medicines.
Specifically, Zealand plans to divert more of its efforts and resources toward V-Go and Zegalogue through partnerships with other firms. It will also restructure its commercial arm in the U.S. without disrupting patient, physician and payor support for the two drugs. Zealand is also on the lookout for commercial collaboration opportunities for its late-stage programs. The restructuring effort will affect most of its U.S. team, but some cost reductions will also be implemented in its Denmark operations.
“We have made the decision to restructure because we believe that seeking commercial partnerships will generate more value for the company and shareholders as we transform the company into a more focused and cost-effective organization. By improving our operational efficiency and targeting business development efforts, we will be in position to fully leverage the value of our most advanced assets and develop new peptide-based therapies. We have a strong R&D pipeline with Phase III readouts this year for dasiglucagon in CHI and, glepaglutide in SBS in the second and third quarters respectively, and Phase I data for our Amylin analogue targeting obesity later this year,” noted Adam Steensberg, the president and chief executive officer of Zealand, in a statement.
These changes are expected to affect 2022 financial expectations, which will be explained further in another update.
In other workforce reduction news, Orchard Therapeutics announced it is cutting its staff numbers by 30% in 2022 in a bid to extend its cash reserves up to 2024.
Orchard intends to divert the focus of its hematopoietic stem cell gene therapy platform toward severe neurometabolic diseases and early research initiatives, including Libmeldy (atidarsagene autotemcel) to treat metachromatic leukodystrophy. The HSC gene therapy program uses blood stem cells to help patients create new ones of any type to treat a wide range of diseases.
The company will also continue with clinical development efforts on OTL-203 for mucopolysaccharidosis type I Hurler’s syndrome and OTL-201 for mucopolysaccharidosis type IIIA. Both are genetic disorders that cause tissue and organ enlargement. Unfortunately, Orchard will be discontinuing efforts for OTL-103 for Wiskott Aldrich Syndrome after receiving written feedback from the U.S. Food and Drug Administration, which is what prompted the decision to cut its employee numbers.
Merck‘s workforce reduction, on the other hand, is a natural part of combining two companies. Merck is letting go of 170 people from Acceleron after it acquired the latter in November 2021. The global biopharma giant issued a Worker Adjustment and Retraining Notification Act on March 15 to 143 legacy staff of the Cambridge company, informing them of their departure in phases until November 18, 2022.
Merck said it has no plans to soon conduct more layoffs or company-wide restructuring.
