Alexion Pharmaceuticals, until recently seen as one of biotech’s biggest success stories, is eliminating roughly 600 jobs and moving its headquarters to Boston amid federal investigations and pressure to cut costs.
The company made its name on Soliris, a treatment for rare diseases that — at a cost of about $700,000 a year — is also the world’s most expensive drug. But after a series of pipeline disappointments and an ill-advised $8.4 billion acquisition, Alexion is facing an uncertain future.
Soliris, which accounts for about 90 percent of its revenue, could lose patent protection as early as 2021, and Alexion — now under new management — has struggled to map out a convincing case for future growth.
In a bid to restructure and cut costs, Alexion will move its home base from New Haven, Conn., to Boston by the middle of next year. The job cuts amount to about 20 percent of Alexion’s global workforce and will save about $270 million by 2019, the company said.
“It’s important that we are in an ecosystem where biotech is front and center,” CEO Ludwig Hantson said on a conference call with analysts, explaining the move. “Needless to say we will have a larger talent pool of people who have biotech experience” in Boston.
The company’s most recent revenue projections — about $3.5 billion in 2017 — remain unchanged.
Tuesday’s move has been widely anticipated since January, when an accounting scandal led Alexion’s longtime CEO, David Hallal, to step down. An internal investigation concluded that the company’s senior management “failed to set an appropriate tone at the top,” inculcating a high-pressure sales environment that has made Alexion the subject of federal investigations.
Alexion’s board hired Hantson in March and tasked him with turning things around. The CEO, who led Baxalta to a $32 billion merger with Shire last year, swiftly replaced most of Alexion’s top management and cut research programs outside the company’s core scientific focus.
Alexion’s decision to move its headquarters out of Connecticut, first reported by the Hartford Courant, comes despite the company’s receipt of $26 million in state aid. Alexion said it plans to keep about 450 jobs in New Haven.
“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,” CEO Ludwig Hantson said in a statement.
September 12, 2017