* Says to sell U.S. plant, cut jobs, incur costs
* Cuts 2009 guidance to operating loss of 1.16 bln crowns
* Shares end down 9.3 percent, after hitting a 4-year low
(Adds detail, quotes; updates share price)
By John Acher
COPENHAGEN, Nov 5 Danish biopharma company
Genmab (GEN.CO) said it would post a deeper than expected
full-year loss due to its plan to sell its U.S. manufacturing
plant and cut about 300 jobs across its business.
Genmab said it expected a full-year 2009 operating loss of
1.16 billion Danish crowns ($231 million) instead of an earlier
indicated loss of 650 million.
It lowered year revenue guidance to about 640 million crowns
from a previous estimate of 750 million.
It was the second downgrade of 2009 guidance in less than
three months. The planned sale of its Brooklyn Park, Minnesota
plant marked a reversal of a less than two-year-old strategy to
secure its own manufacturing capacity.
Genmab shares closed down 9.3 percent at 117 crowns, up from
an earlier four-year low of 106 crowns.
Genmab said it did not intend to discontinue any current
development programmes and would continue to focus on creating
antibodies with the potential to treat cancer.
"We believe that cost pressures on our industry will be
permanent," chief executive Lisa Drakeman said.
Genmab's workload has been reduced as partners take a bigger
role, and its next clinical projects would be small, early-stage
projects so the company needed to match its headcount to the
expected workload, she said.
Genmab bought the Brooklyn Park antibody production plant in
early 2008 from PDL BioPharma (PDLI.O) for $240 million cash at
a time when it found manufacturing capacity scarce.
"Conditions have changed dramatically since that facility
purchase was investigated," Drakeman said, adding the company
could now access sufficient capacity at its contract
manufacturer Lonza LONN.VX.
Going forward Genmab will not need such a substantial plant
to produce zalutumumab, an antibody in clinical development for
treatment of head and neck cancer, she said.
The plant will operate on a maintenance-only mode with a
small staff, until a sale is agreed, Genmab said.
Genmab said the fair value of the Brooklyn Park plant, less
the cost of selling it, was about $145 million and it would
recognise a non-cash impairment charge of about $83 million in
the fourth quarter related to the sale.
Chief financial officer David Eatwell said Genmab had been
advised by independent experts on the value of the plant but
said of the expected sale price: "Of course it is an estimate".
It estimated cash costs of the 300 job cuts at 105 million
crowns, of which 38 million will be taken in 2009 and 67 million
in 2010. The reorganisation was expected to yield annual savings
of about 300 million Danish crowns ($60 million).
Genmab said it expected its 2009 operating expenses to be
about 1.3 billion crowns instead of the 1.4 billion foreseen
before the reorganisation.
(Reporting by Copenhagen newsroom; Editing by Simon Jessop and
($1 = 5.011 Danish crowna)