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Idenix Laying Off 100, Amends Novartis Deal
  Sept 28, 2007 The Associated Press
CAMBRIDGE, Mass. - Biotechnology company Idenix Pharmaceuticals Inc. said Friday it is cutting 100 positions and amending an agreement with Novartis to stop all activities dealing with the hepatitis B drug Tyzeka.
Novartis will have full responsibility for all activities related to the drug, which is called Sebivo in Europe. Idenix will still receive royalty payments on sales, but will cease to co-promote the drug in the U.S. and Europe. Novartis owns 56 percent of Idenix.
The job cuts will leave the company with about 200 employees. The jobs being cut mostly support the development and sale of the hepatitis B drug. The move is expected to reduce the company's cash burn rate by 40 percent to 50 percent.
The company expects a charge between $5 million and $10 million for employee severance and asset writeoffs. But, the layoffs will result in savings between $40 million and $45 million on an annual basis, Idenix said.
In July, the Food and Drug Administration halted development of the company's hepatitis C drug candidate valopicitabine because results did not show enough benefit based on the observed risks.
Shares of Idenix fell 26 cents, or 8.6 percent, to $2.77 in morning trading. The stock has traded between $2.29 and $10.83 over the last 52 weeks.
Idenix to lay off 100
Boston Business Journal
Idenix Pharmaceutical Inc. will be laying off 100 employees -- a third of its workforce -- as part of a massive restructuring program undertaken after clinical setbacks for a lead compound.
The Cambridge, Mass.-based company (Nasdaq: IDIX) announced on Friday that the company would eliminate 100 positions in the United States and Europe, all involved in the development and commercialization of hepatitis B treatment Tyzeka, which is known as Sebivo internationally.
The remaining 200 employees will focus their development activities on hepatitis C and HIV treatments, both in discovery and development programs. Idenix had had about 185 of its 300 employees based in Cambridge, with the rest in Europe. Between 35 and 50 jobs in Massachusetts will be affected.
As part of the restructuring, Idenix has also amended its collaboration deal with Swiss pharmaceutical giant Novartis Pharma AG regarding Tyzeka. Idenix has agreed to discontinue further development, manufacturing and commercial activities relating to the drug and cede them to Novartis, where both had shared those activities 50/50.
Instead, Idenix will receive a royalty on worldwide product sales. The overall cuts are expected to save Idenix $40 million to $45 million annually and reduce its cash burn rate by as much as 50 percent.
Novartis owns 56 percent of Idenix and has first right of refusal for Idenix's pipeline.
Idenix announced during the summer that it would pursue restructuring after the U.S. Food and Drug Administration halted clinical trials for its hepatitis C compound valopicitabine over safety concerns 1000 .
News of the outcome depressed the company's stock price from around $6 to the $2 range.
The Boston Business Journal first reported news of the anticipated layoffs.
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