UK pharmaceutical company cuts jobs on US drug approval setback
Wednesday, 20 Feb 2008 15:01
Vernalis is cutting jobs
British biotech firm Vernalis is cutting over half its staff after the company's migraine drug Frova failed to receive US regulatory approval for the treatment of menstrual migraine.
The company plans to shed 120 jobs from its current headcount of 210, all of whom will be based in the UK.
The job losses will be in areas other than R&D, where the company hopes to focus its resources to remain competitive.
Vernalis also agreed to the early settlement of a $56 million (£28.88 million) loan due to US partner Endo Pharmaceuticals in August 2009.
Wokingham-based Vernalis will pay Endo $7 million (£3.6 million) in cash now and forego future royalties on US sales of Frova, until annual sales exceed $85 million (£43.84 million).
Vernalis and Endo are preparing their responses to the US Food and Drug Administration's (FDA) decision, which has initially refused to approve the companies' application for Frova in the treatment of menstrual migraine.
Peter Fellner, Vernalis's executive chairman, said: "I believe the settlement of the outstanding loan, together with the extensive restructuring of the business, will create a platform that will enable us to rebuild significant shareholder value in the mid term."
Vernalis has two marketed products, Apokyn to treat immobilising "off" episodes in patients with advanced Parkinson's disease and Frova, to treat migraine.