Announces rights issue to fund expansion of product portfolio
Swedish Orphan Biovitrum (Sobi), a Swedish niche pharmaceutical company focused on developing drugs for rare diseases, will cut 70 jobs as part of a restructuring to reduce costs by approximately SEK100m (€11.1m; US$15.7m) annually. The savings will be generated gradually during 2011 with full effect from 2012.
The company has also announced a fully guaranteed rights issue of SEK600m, which is subject to approval at next month’s annual general meeting.
Cost savings and efficiency improvements will be implemented across all functions. Most of the job losses will be in preclinical development, CMC (Chemistry, Manufacturing and Controls) and within Manufacturing and Quality Control/Quality Assurance in Stockholm.
Negotiations will now begin with the relevant trades unions, the company said.
In spite of the reduction in capacity in preclinical development, Sobi said its goal is to retain expertise and competence. The company will use external resources when needed to maintain flexibility and reduce fixed costs.
The changes will not affect clinical development projects that are currently in progress, the company said.
‘By taking these steps we will increase flexibility and reduce costs. I regret that this will also involve staff cuts, but unfortunately this is necessary in order to secure Sobi’s future profitability,’ said Sobi chief executive Kennet Rooth.
‘We have a number of product launches in progress and several late-stage development projects with great market potential and these projects require large resources.
‘In addition, we are creating possibilities for growth through business development and geographical expansion.’
The proceeds of the rights issue are expected to improve the company's capacity to take advantage of commercial opportunities, including expansion of the product portfolio through additional in-licensing, distribution agreements and product acquisitions; commercialisation of new products; and continued geographical expansion through the extension of the company’s marketing organisation and through cooperation with external partners.
In 2010 Sobi had revenues of about SEK 1.9bn and approximately 500 employees.