NEWS OF THE WEEK
lifts a cloud from the field of RNAi therapeutics
YEAR AFTER deciding to end research in the field of RNA interference, the Swiss drug giant Roche has divested its RNAi assets to the small drug discovery firm Arrowhead Research. The sale lifts a pall that settled over the field after Roche’s November 2010 announcement that it was exiting RNAi drug research. At the same time, the deal shows how far the value of assets in the RNAi business has fallen. Roche spent roughly a half-billion dollars to amass its position in RNAi, including $331 million paid to Alnylam Pharmaceuticals in 2007 for access to RNAi technology and $125 million for the purchase of Mirus Bio in 2008. Arrowhead, in contrast, is paying Roche no money for these and other assets; instead it is giving the Swiss firm an ownership stake of slightly under 10%. Arrowhead now owns the former Mirus R&D facility in Madison, Wis., which employs a team of 40 scientists. Arrowhead also gets licenses from several leading
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NOVARTIS TO CUT 2,000 JOBS EMPLOYMENT: Layoffs follow similar
moves by Amgen, AstraZeneca
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WISS PHARMACEUTICALS maker Novartis
plans to eliminate 2,000 jobs—equivalent to 1% of its workforce—as it tries to reduce expenses in line with drug price cuts and the impact of the strong Swiss franc on profits. About 1,100 employees will be laid off in Switzerland, and another 900 or so will be let go in the U.S. Some 270 preclinical safety profiling and siRNA research positions in Basel, Switzerland, will be shifted to the firm’s Cambridge, Mass., site, a company spokeswoman says. Plans include the shutdown of two chemical intermediate buildings in Basel and an over-the-counter drug operation in Nyon, Switzerland, to achieve total annual savings of $200 million. At the same time, the firm will hire 700 new employees in “low-cost” countries including China, where its sales rose 35% in the past 12 months. Other jobs will be outsourced as the plan goes into effect over the next five years, says CEO Joseph Jimenez. Novartis will take a $300 million charge
Alnylam conducts RNAi research in Cambridge, Mass.
MICHAEL MCCOY
against earnings to pay for the cuts. All told, according to Swiss trade union Unia, Novartis’ plans threaten 760 Swiss jobs in R&D and another 320 in production. The union is calling on the firm, which announced net income of nearly $2.5 billion for the quarter ended Sept. 30, to forego the layoffs and work with Unia on alternatives. Novartis’ moves follow similar cutbacks at other pharmaceutical firms. A year ago, fellow Swiss drug maker Roche said it would cut 4,800 jobs, largely in the U.S. Earlier this month, AstraZeneca said it will cut 700 U.S. jobs while boosting manufacturing operations in China. Separately, biopharmaceutical maker Amgen will cut 380 research jobs, about 2% of its workforce, mostly in the U.S. The plan was revealed a few days before the firm reported third-quarter earnings of $1.1 billion before unusual charges. In a conference call with investors, Roger M. Perlmutter, Amgen’s executive vice president of R&D, said the cuts “fell most heavily on scientists in early discovery.” He added that the headcount reduction “was necessary to refocus our R&D programs on those efforts likely to have a near-term clinical impact.”—MARC REISCH
WWW.CEN-ONLINE.ORG
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OCTOBER 31, 2011
N OVART IS
DRUG DISCOVERY: Acquisition
firms, including Tekmira Pharmaceuticals for RNAi drug delivery technology and Alnylam for RNAi intellectual property and short interfering RNA structures. Arrowhead was already a player in RNAi delivery technology. To help pay for the development of the Roche assets, Arrowhead has closed on about $10 million in new financing. It also has an agreement with investment firm Lincoln Park Capital to provide up to $15 million to support the new operations in Madison. “This acquisition is transformational for us and important for the broader RNAi field,” Arrowhead CEO Christopher Anzalone told investors on a conference call. “Combined with our existing advanced RNAi delivery technologies, we believe we are now the most comprehensive RNAi therapeutics company in the world.” Laurence Reid, chief business officer at Alnylam, which has two RNAi-based drugs in Phase I clinical trials, agrees that the sale is a plus for the development of RNAi. Roche was a major big pharma investor in the field and its exit was a disappointment, Reid says. “This brings those assets back into the hands of people who are going to care about them and nurture them.”— ALNYLAM
ROCHE RNAi ASSETS GO TO ARROWHEAD
A Novartis building looms over the firm’s campus in Basel.
