In hope of combating recent financial troubles, New Haven–based biotechnology company Achillion Pharmaceuticals Inc. announced a restructuring plan on Thursday, saying it will reduce operating expenses by 12 percent, or about $10 million a year, and its workforce by 20 percent, to about 70 employees.
Under this plan, approximately 17 New Haven employees will face termination. The reduction in expenditure will free the company to focus on improving its research in drugs that inhibit factor D, an enzyme in the immune system, to related rare diseases.
The company reported dismal financial numbers last year. According to a Feb. 22 press release, Achillion posted a $23.2 million net loss for the last quarter, almost $20 million more than the loss reported for that quarter in 2016. The $23.2 million contributes to the company’s total net loss of $85.2 million for the year of 2017. After the restructuring announcement Thursday, Achillion stock fell $3 a share, according to the Hartford Business Journal.
New Haven Economic Development Advisor Matthew Nemerson SOM ’81 noted that success is often unpredictable in the biotech industry. He praised the company, saying that while people may now be trying to find out what the company did wrong, the recent events are part of the nature of the industry.
“Often times you’re one clinical trial away from being worth a billion dollars, or you’re going to be downsizing,” New Haven Economic Development Advisor Matthew Nemerson SOM ’81 said.
Achillion focuses on developing inhibitors for the complement alternative pathway, which helps the immune system defend against infections. In a Feb. 22 statement, Achillion CEO Milind Dede said the company hopes to deliver on its promise to provide “transformative therapies” to patients. Although he said he understands the difficulties of restructuring, he believes the company’s work on the complement alternative pathway will be successful.
In September 2017, the company faced a major disappointment, when Janssen Pharmaceutica, a subsidiary of Johnson & Johnson, ended its partnership with the company on a hepatitis C drug, after two years of collaboration. Following the announcement, Achillion stock closed down 22 percent, according to the Hartford Courant. To add insult to injury, Johnson & Johnson sold all its investments in Achillion in November.
Although Achillion is facing difficult times, President and CEO of BioCT Dawn Hocevar said that the general state of bioscience in Connecticut is “good and growing” and that Achillion cuts are not a cause for concern. BioCT supports entrepreneurship and growth in Connecticut’s life sciences industry.
“Achillion is just the nature of bioscience business,” Hocevar said. “They are not closing and making a good business decision based on the changes with J&J.”
Achillion was incorporated in 1998.
Isabel Bysiewicz | email@example.com
Clarification, Feb. 26: This article’s headline was adjusted to better reflect Achillion’s announcement.