decided to scale back operations within its biopharmaceutical division and divert resources to promising late-stage programs. The company will thus cut 230 positions, or 14% of its global workforce.
Elan expects that these changes will reduce operating expenses in 2009 by $30 million to $35 million and by approximately $50 million in a full year. Severance and related charges are expected to be $15 million and will be recorded as a charge in the first half.
Adjustments include a postponement of biologics manufacturing activities, a strategic realignment of R&D within the biopharmaceutical business, as well as a reduction in related G&A and other support activities.
In Ireland, where Elan’s biological manufacturing and related fill/finish activities are based, approximately 115 positions will be impacted. A further approximately 115 positions will be affected in the U.S., mainly in the areas of research, clinical development, biopharmaceutical development, as well as related corporate support and administrative services.
Elan expects to reassess the opportunity to invest in a biologics manufacturing facility and restart its related fill/finish activities after the company evaluates Phase III data on bapineuzumab in Alzheimer’s disease.
Elan reiterates its financial guidance for 2009 and expects revenue to grow by double-digit percentages, to be adjusted-EBITDA profitable for the year, and to end the year with cash and investment balances in the region of $200 million.