|Alnylam to Restructure Organization; FDA rejects Bristol/Astra Diabetes Drug|
|By Staff and Wire Reports|
|Thursday, 19 January 2012 22:09|
Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY), a leading RNAi therapeutics company, announced it intends to implement a strategic corporate restructuring, including an approximate 33% reduction in its workforce, as it aligns its resources to focus on what it believes to be the companys highest value opportunities with accelerated clinical development plans. These include a previously announced company focus on its Alnylam 5x15 RNAi therapeutic product strategy with ALN-TTR for the treatment of transthyretin-mediated amyloidosis (ATTR) and ALN-APC for the treatment of hemophilia as lead programs and advancement of other pipeline programs with existing alliances and new partnerships.
We have made remarkable progress in advancing RNAi therapeutics as a new class of innovative medicines, including recent results demonstrating human proof of concept in our ALN-TTR program and clinical efficacy for RNAi therapeutics in our ALN-PCS program. As we effect our ongoing transformation from a platform company to a product company, now is the time to focus our near-term efforts and resources on what we believe to be our highest value opportunities; specifically, accelerated clinical development plans for our programs in transthyretin-mediated amyloidosis and hemophilia, while advancing other pipeline programs through existing alliances and new partnerships that we aim to form in the future. As a result of this increased focus, we are making a business decision to implement an organizational restructuring that will include an approximate 33% reduction in our workforce, said John Maraganore, Ph.D., Chief Executive Officer of Alnylam. At a personal level, this was a very difficult decision to make, but we are convinced that it is an important step in continuing to build our company for the long term. As we implement this change, we are grateful to all our employees for their dedication, passion, and commitment in advancing RNAi therapeutics to patients.
Alnylam expects the reduction in personnel costs, along with other external costs, to result in a savings of approximately $20 million in 2012 cash operating expenses. Alnylam estimates that it will incur one-time restructuring costs of approximately $4 million including employee severance, benefits, and related costs, which it expects to incur in the first quarter of 2012. The company recently increased its year-end 2011 cash guidance to approximately $260 million, and will provide financial guidance for 2012 in connection with its 2011 financial results announcement in February.
The U.S. Food and Drug Administration declined to approve an experimental diabetes drug co-developed by Bristol-Myers Squibb Co. (NYSE:BMY) and AstraZeneca PLC (NYSE:AZN), asking for more clinical data to assess its safety and efficacy.
Expectations for the drug, dapagliflozin, were already reduced because last year an FDA advisory committee recommended against its approval, citing concerns about potential safety risks. More recently, however, Bristol executives had spoken optimistically about securing regulatory approval.
AstraZeneca's American depositary shares declined $1.28, or 2.7%, to $46.92 in recent trading. Bristol-Myers shares dropped 26 cents, or 0.8%, to $33.47.
"The commercial potential of the product has always seemed in doubt," Bernstein analyst Tim Anderson wrote in a research note. "The drug has had little support from diabetes experts, and the diabetes field is already crowded with a host of different therapeutic options, many of which are now available generically."
Deutsche Bank analyst Barbara Ryan had estimated the drug would generate more than $400 million in global sales in 2016.
Bristol and Astra said Thursday that the FDA has requested additional clinical data "to allow for a better assessment of the benefit-risk profile for dapagliflozin." This includes results from ongoing studies and may require new clinical trials--something that could delay any regulatory approval significantly.
The companies said they remain committed to the drug's development, and "will work closely with the FDA to determine the appropriate next steps for the dapagliflozin application."
Bristol discovered the compound and formed a diabetes partnership with AstraZeneca in 2007. The setback for dapagliflozin reinforces Bristol's decision to spread the risk rather than develop it solo.
Dapagliflozin is an inhibitor of a target in the kidney known as SGLT2. It is designed to block re-absorption of blood sugar and causes excretion of the glucose in urine. The companies applied for approval to market the drug as a treatment for type 2 diabetes, which is the most common form of diabetes.
Other SGLT2 inhibitors are being developed by Eli Lilly & Co. (NYSE:LLY) and Johnson & Johnson (NYSE:JNJ).
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