Elan cuts workforce to reduce costs
Irish pharmaceutical company Elan is to reduce its workforce by up to 1,000 as part of a series of changes it hopes will put it back on the right footing.
Amidst shareholder concerns, the company unveiled second quarter net losses in excess of US$800m (€813m) compared with a net income of $134m (€136m) for the same period last year.
Although it recorded significant losses, Elan's revenues remained flat at $456m (€463m) - but included a 50% increase in product sales - and the company remains cash rich, with a balance at the end of June in excess of $1.3bn (€1.3bn). The measures are expected to reduce operating expenditure by $300m (€305m) per year, while the cost of restructuring could set Elan back $200m (€203m) over the next 18 months. Up to 1,000 employees out of the total figure of 4,700 will be lost by the end of the year, says Elan, but this figure will rise further as non-core businesses - which employ approximately 2,100 people - are disposed of.
Elan says it will focus on neurology, pain and autoimmune diseases and stresses that its r&d programme will not be affected by the restructuring. The company currently has four products in development for six indications, including Antegren for multiple sclerosis and Crohn's disease, and Prialt for severe chronic pain; it expects to seek approval for four products by the end of 2004.
'This action demonstrates our commitment to preserving Elan's exciting pipeline of late stage and early stage products, including our lead product Antegren, a potential breakthrough treatment for multiple sclerosis and Crohn's disease, which is in Phase III clinical trials,' said Dr Garo Armen, who recently replaced Donal Geaney as chairman of the board.
'Elan has high expectations for Antegren which we believe, if commercialised, will make a significant difference to the lives of patients.
'This action also represents an important first step in simplifying the company's balance sheet and delivering on our promise to reduce the complexity of Elan's business.'