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Alexion’s restructuring will reduce its global workforce by 20%, including closing a manufacturing facility in Rhode Island.
Alexion Pharmaceuticals announced an operational plan on Sept. 12, 2017 to realign its global organization with its refocused corporate strategy. The plan is expected to deliver approximately $270 million in GAAP [generally accepted accounting principles] and approximately $250 million in non-GAAP pre-tax savings annually by 2019. The restructuring will reduce the Company’s global workforce by approximately 20%, the company said in a press release. Alexion said it will use the savings to invest in growth, improve operating margin, and reinvest in R&D.
The restructuring will focus the company’s development portfolio, simplify business structures and processes across the company's global operations, and consolidate manufacturing capabilities, according to the press release. In R&D, the company will eliminate spend and headcount associated with previously announced de-prioritized pipeline programs, which include ALXN1101 (cPMP replacement therapy) and ALXN6000 (samalizumab), as well as partnerships with Moderna Therapeutics, Blueprint Medicines, and Arbutus Biopharma.
The new facilities strategy will result in the closing of multiple Alexion sites, including the Alexion Rhode Island manufacturing facility and certain regional and country-based offices. Alexion has had a positive working relationship with the state of Rhode Island, however, the Company is aligning its manufacturing facilities with its ongoing multi-product network manufacturing strategy, which utilizes Alexion’s manufacturing operations in the US and Ireland, and manufacturing capacity through its manufacturing partners.
The company said it will optimize its global operating structure to leverage synergies across regions and countries, reducing operating redundancies and focusing on continuity of its field teams. In parallel with the R&D and commercial organizational changes, the company is right-sizing certain general and administrative functions, such as human resources, finance, and information technology (IT), including outsourcing certain non-core finance and IT roles to support the realigned business.
As part of these initiatives, Alexion plans to relocate its headquarters to Boston, MA, by mid-2018. The company plans to have approximately 400 positions in Boston. Boston will provide access to a larger biopharmaceutical talent pool and a variety of life-sciences partners to further support future growth initiatives, the company noted.
“By streamlining our operations we will create a leaner organization with greater financial flexibility that is highly focused on delivering for patients, growing our rare disease business, and both leveraging our leadership in complement and pursuing disciplined business development to expand the pipeline,” said Ludwig Hantson, CEO of Alexion, in the company press release. "These types of changes are difficult and we recognize that they have a personal impact on people who have been dedicated to the mission of Alexion. We thank our employees for their contributions to the achievements of Alexion. While difficult, these changes were necessary to enable the company to deliver sustainable long-term performance to support our ability to continue to develop and deliver life-changing therapies for patients.”
In addition, New Haven, CT, will be the company’s Center of Excellence for its research and process development teams. Approximately 450 positions will be based in New Haven, including employees working in the research and process development laboratories, the clinical supply and quality teams, nurse case management, and a number of important enterprise business services.
“Alexion’s 25-year history began in New Haven, and Connecticut remains a critical part of our future. We value our relationship with the state of Connecticut, and our New Haven-based research team is critical to growing and strengthening Alexion’s leadership in complement, which will allow us to fulfill our mission of serving patients and families with rare and ultra-rare diseases,” said Hantson in the press release.