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MediGene cuts workforce in half to save cash

Daily News | September 30, 2010

Selina McKee

MediGene cuts workforce in half to save cash

Frankfurt, Germany-based MediGene has unveiled plans to cut its workforce in half under a bid to garner savings of around 5 million euros a year and create a more attractive financial profile for the company.

MediGene announced yesterday that its personnel count will be snipped from 107 to 55 as part of an organisational restructure, which should cost the group around 1 million euros, but stressed that its ability to develop its portfolio of therapeutic assets will remain unaffected by the move.

The staff cull was triggered by the completion of both the EndoTAG-1 Phase II trial in triple receptor negative breast cancer and the CMC conversion from freeze-drying to spray drying, as well as the sale of full European marketing and distribution rights to Eligard (leuprolide acetate) for the treatment of hormone-dependent prostate cancer to Astella Pharma.

As such, the majority of the redundancies will come within the teams involved in these clinical trials, the firm said, and noted that it also intends to reduce its supervisory board to better reflect its slimmer size.

According to Arnd Christ, MediGene’s chief financial officer, with a lower cost base, solid cash-position and royalty receipts from both Eligard and genital warts ointment Veregen (sinecatechins), distributed by Nycomed in the US and Abbott Arzneimittel in Europe, the company could reach profitability next year. “However, management's intention is to seek to grow the business organically and via strategic transactions,” he added.

To that end, MediGene is currently seeking a partner to take its anti-cancer candidate EndoTAG-1 into Phase III development and carry all the costs of the end-stage programme, and it confirmed that several companies are currently in the process of conducting due diligence in consideration of a potential hook up. 

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