Alkermes is cutting 150 jobs, or 18% of its workforce, in light of Eli Lilly’s decision to ax development of the firms’ inhaled insulin product, AIR® Insulin. The company is also closing its commercial manufacturing facility in Chelsea, MA. Alkermes will bear related charges of between $20 and $25 million.
On March 7, Eli Lilly reported that it would no longer develop AIR Insulin, which was already in Phase III trials. Eli Lilly said that while there were no safety issues with the product, the firm did not believe that it had sufficient commercial potential. In fact, last year Pfizer decided to abandon its inhaled insulin treatment, Exubera, after the product failed to meet market expectations.
Alkermes expects to take a restructuring charge in the fourth quarter of fiscal 2008 in the range of $5 to $10 million associated with workforce reduction and facility expenses. In addition, the company anticipates an impairment charge of up to $15 million in the fourth quarter of fiscal 2008 related to fixed assets at the Chelsea facility.
Alkermes says that it will see cost savings from this move in the range of $15 million to $20 million in fiscal 2009.