Elan to cut 115 Irish staff in 'alignment of resources'

DRUG MANUFACTURER Elan yesterday announced that 115 of its Irish workforce will lose their jobs as part of what the company called an “alignment of resources”.

The company has also frozen plans to open a new biologics manufacturing operation in Dublin.

A further 115 jobs in the United States will also be made redundant.

The company said that as part of efforts to “manage its overall cost base”, it would “refine its business operations and functions to realise greater efficiencies”.

Elan has been looking to cut costs as it finances critical Phase III trials of an bapineuzimab, an Alzheimer’s therapy it is developing in association with Wyeth.

Executives have said previously that they will have cash reserves and investments at the end of the current year of around $200 million, down from $450 million at the end of the 2008.

In a statement, Elan said it expected to save as much as $50 million in operating costs in a full year as a result of the redundancies, which amount to 14 per cent of the company’s workforce. It will take a $15 million exceptional charge in the current period to cover “severance and related” costs.

Apart from the latest restructuring, Elan has hired Citigroup to conduct a strategic review of the company. The stated preference of Elan executives is to sell around a quarter of the company to a major industry player who would have the financial muscle to roll out the commercial infrastructure necessary to deliver any successful Alzheimer’s drug.

Other options being examined include the sale of the company.

The company said it would reassess the prospects for establishing a biologics plant in Dublin after it has had the opportunity to evaluate the Phase III data from the bapineuzimab trial.

Announcing the changes, Elan reiterated its financial guidance to the market for double-digit revenue growth this year.