A week after pulling its leukaemia drug Iclusig from the US market , Ariad Pharmaceuticals is laying off 40% of its workforce across the Atlantic, some 160 staff.
The job cuts will yield savings of around $26 million in 2014 and restructuring charges associated with the move will be about $5 million. The move comes as no surprise given the torrid time Ariad has endured of late.
The stock has collapsed since the US Food and Drug Administration raised concerns a month ago about a study of Iclusig (ponatinib), which is approved for chronic myeloid leukaemia and Philadelphia-chromosome positive acute lymphoblastic leukaemia. The trial, which compared the drug with Novartis' Gleevec (imatinib) in patients with newly-diagnosedCML was then halted after a number of arterial thrombotic events were observed in those treated with Iclusig.
Then, just last week, Ariad temporarily suspended marketing the drug at the request of the FDA. Although the company said it is actively working with the agency to resume sales, observers fear the worst.
Chief executive Harvey Berger said the cuts represent "a very painful and difficult action in which we are losing highly talented and dedicated employees, many of whom have worked for Ariad for a number of years, but it is a necessary step in strengthening the company financially".
Following the workforce reduction, which does not affect jobs in Europe, Ariad will have 295 employees.