Vertex Pharmaceuticals plans to cut 370 jobs in order to cope with the decline in use of its hepatitis C treatment Incivek (telaprevir).
The drug was only approved in the US in 2011, but already sales have been hit hard by competition, with Vertex posting third quarter revenues of $85.6m for the drug – down $170m on the same period in 2012 when sales were $254.3m
The plight of Incivek will not have been helped by the drug’s links to fatal skin reactions, which led to the addition of a boxed warning in late 2012.
As a result, Vertex said it intends to focus on areas with potential, such as cystic fibrosis through Kalydeco (ivacaftor), resulting in a reduction of its Incivek workforce.
Of the 370 positions to be cut – which account for 15 per cent of the company’s global workforce – 155 roles are to be eliminate in Vertex’ base of Massachusetts in the US.
The company expects to take a charge of between $150m and $200m during 2014 to cover the cuts.
Dr Jeffrey Leiden, chairman, president and CEO of Vertex, explained the decision.
“As new medicines for hepatitis C near approval, fewer people are starting treatment with Incivek, and as a result, we are reducing our workforce supporting this medicine.
“Today is a difficult day for everyone at Vertex, but these changes are necessary as we work to develop new breakthrough medicines in the coming years.
Hepatitis C has become an incredibly competitive market for pharma companies in recent years, and that trend looks set to continue with new launches planned by major players.
Hepatitis C drugs already available include GlaxoSmitKline’s Revolade/Promacta (eltrombopag) and Merck’s Victrelis (boceprevir).
Other drugs currently undergoing regulatory assessment in the US include Johnson & Johnson (J&J)/Medivir’s simeprevir and Gilead Sciences’ sofosbuvir, while both Boehringer Ingelheim and AbbVie have hepatitis C regimens in late-stage development.
J&J’s involvement in hepatitis C also includes an agreement with Vertex to market Incivek in the EU, where it is branded as Incivo. Sales in this region have not been hit has hard as in the US, and Vertex reported a similar royalty revenue stream from J&J in the third quarter of 2013 as in 2012.
Click here for original source.