Genmab to sell plant and cut jobs

Danish company Genmab is planning to undertake a reorganisation to make its business sustainable. It intends to sell its manufacturing facility located in Brooklyn Park, Minnesota, US, and cut approximately 300 jobs.

However, the company does not intend to discontinue any of its ongoing development programmes as a result of this reorganisation.

The Brooklyn Park facility, which is ready for sale, will operate on a maintenance-only mode with a small staff, until a sale is agreed. Genmab has estimated the fair value of the facility to be approximately US$150m (Euro 101m) less sales related costs of approximately $5m (â"šÂ¬3.4m).

The annualised impact of the reorganisation is expected to yield savings of approximately DKK300m (â"šÂ¬40.3m), including non-cash items of approximately DKK60m (â"šÂ¬8.1m).

The job cuts will take place across all the company's international locations and are the result of it partners taking on increasing responsibility for upcoming studies. In the future Genmab says it will adopt a more flexible model based on contracts with vendors to address varying demand for clinical development work. Its future manufacturing requirements will also be met through working with contract manufacturing vendors.

"It is vital that we refocus our energies on what Genmab is best at and what the pharmaceutical industry needs most - innovation," said Dr Lisa N. Drakeman, ceo of Genmab. "The challenging demands on our industry require Genmab to take a hard look at our organisation and continue to prioritise spending."

The company has also revised its revenue estimate for 2009 from DKK750m (â"šÂ¬101m) to DKK640m (â"šÂ¬86m) as a result of the delay of a milestone payment to 2010 that was originally expected in 2009 under the Arzerra (ofatumumab) collaboration with GlaxoSmithKline.