Amylin Pharmaceuticals is reducing its San Diego workforce by approximately 25 percent, or 340 employees, and reducing its anticipated 2009 cash expenditures by more than $80 million.
The company restructuring and workforce reduction are part of its business plan to be cash flow positive by the end of 2010. The company said it “remains fully staffed to grow product revenue from Byetta (exenatide) injection and Symlin (pramlintide acetate) injection and bring exenatide once weekly to market. Amylin also noted that its collaboration with Eli Lilly on the global development and commercialization of exenatide is unaffected by the restructuring.
Byetta has endured some scrutiny of late, due to the once-weekly diabetes drug being linked to four deaths, which led to FDA warnings and a personal injury lawsuit. However, a September study in the Lancet found that Byetta provides better glycemic control and is more convenient than the current twice-daily regimen.
“We've made a difficult, but necessary, decision as a result of factors affecting our business,” said Daniel M. Bradbury, president and CEO at Amylin. “Sales revenues have not met the expectations we had when we scaled up our organization. Today’s actions will bring operating expenses more in line with revenue and enable us to continue to achieve our business goals of increasing sales of Byetta and Symlin and bringing exenatide once weekly to market as quickly as possible.”
The Company also stated that its Ohio facility, where exenatide is manufactured, is unaffected by the restructuring. After the workforce reduction, Amylin's employee base will be 1,800 worldwide, with approximately 900 employees in San Diego.
Amylin said that the changes will result in over $100 million reductions in generally accepted accounting principles (GAAP) operating expenses in 2009 and even greater reductions in 2010. The planned 2009 reduction includes employee and nonemployee related costs. As a result of the reductions, the company estimated the use of cash from operations for 2009 will be reduced by more than $80 million. The Company will record a restructuring charge in the fourth quarter, which will primarily include severance and other costs related to workforce reductions.