(Reuters) - Alexion Pharmaceuticals Inc (ALXN.O) said on Tuesday it would lay off about 20 percent of its workforce and sharpen its focus on its core rare disease drugs business, as it looks to restore investor confidence.
Alexion has been roiled in recent months by a sales practices scandal related to Soliris, its pricey rare disease treatment, as well as an exodus of top management.
Alexion’s chief executive and chief financial officers resigned in December, weeks after the drugmaker said it was investigating allegations related to its sales practices.
The company named longtime Biogen Inc (BIIB.O) finance chief Paul Clancy as CFO in June, months after appointing former Baxalta executive Ludwig Hantson as CEO.
Alexion’s restructuring efforts showed the drugmaker was focused on execution and serious about controlling costs, Cowen & Co analyst Eric Schmidt said.
Clancy, on a call with analysts, said rebuilding Alexion’s pipeline, which includes treatments for rare diseases, was a “critical need.”
Alexion’s growth so far has been fueled by Soliris, which has a U.S. list price of about $480,000 per year but faces looming competition.
“We are optimistic that the process of restoring credibility with investors has begun, and believe that Alexion can soon emerge as one of the cleaner large cap names within biotech,” Schmidt said.
Alexion, which had about 3,100 employees worldwide as of the end of last year, also said it would close some offices and manufacturing sites, including its Rhode Island facility.
The layoffs follow a 7 percent workforce reduction announced by Alexion in March.
The drugmaker will also relocate its headquarters to Boston from New Haven, Connecticut by mid-2018, the company said.
Alexion expects its restructuring to yield cost savings of $270 million each year by 2019, on a pre-tax, adjusted basis.
It forecast pre-tax expenses of $340 million to $440 million related to the restructuring.
Alexion’s shares were slightly lower at $142.33 in late morning trading. The stock has gained about 16 percent since the beginning of the year.
Reporting by Manas Mishra in Bengaluru; Editing by Sai Sachin Ravikumar