Copenhagen, Denmark-based Genmab intends to sell its manufacturing facility located in Brooklyn Park, Minnesota, USA.
The proposed sale comes alongside a decision to restructure the workforce. Overall, the company, a publicly-traded international biotechnology company that creates and develops fully human monoclonal antibody-based products for the treatment of life-threatening and debilitating diseases, plans to cut 300 biotech jobs.
The annualised impact of the reorganisation is estimated to yield savings of approximately DKK 300 million or $60 million.
Flexible model
Genmab contemplates reducing staff across its international locations in an effort to match its workload to the resources needed to carry them out. The workload for Genmab’s development employees, in particular, has decreased and is expected to remain low as partners take on increasing responsibility for upcoming studies. The company does not intend to discontinue any of its ongoing development programmes.
At certain Genmab locations the reduction in headcount and severance packages offered are subject to consultation discussions. However, the company estimated that the cash cost of the reduction in workforce including severance, retention payments and other costs to be approximately DKK 105 million or $21 million.
Genmab will adopt a more flexible model based on contracts with vendors to address varying demand for clinical development work going forward.
The company highlighted that the manufacturing environment has changed as contract manufacturing resources in the industry have become more available. This comes at a time when Genmab is anticipating limited short-term internal demand. The Brooklyn Park facility, which is ready for sale, will operate on a maintenance-only mode with a small staff, until a sale is agreed.
Genmab expects its 2009 revenue to be approximately DKK 640 million ($128 million) compared to the previous estimate of DKK 750 million ($150 million).
Focus
Genmab will focus on innovation and continue to create new antibodies with the potential to treat cancer.
Towards the end of October, the company reached a milestone for Arzerra (ofatumumab) under the terms of its collaboration with GlaxoSmithKline. A milestone payment of approximately $23 million was triggered by the FDA approval of Arzerra for the treatment of patients with chronic lymphocytic leukemia (CLL) that is refractory to fludarabine and alemtuzumab.
Arzerra is a monoclonal antibody that causes the body’s immune response to fight against normal and cancerous B-cells. Arzerra attaches to the small and large loop epitopes – on a molecule called CD20, which is found on the surface of B-cells, the type of cell which becomes cancerous in CLL.
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