MediGene to cut workforce by half

Published: 29-Sep-2010

Management aims to strengthen pipeline through strategic deal


German biotechnology firm MediGene is to cut its workforce by half in a downsizing following the completion of its EndoTAG-1 Phase 2 trial in triple receptor negative breast cancer and the CMC conversion from freeze-drying to spray drying.

This process will see the total number of employees cut from 107 to around 55. MediGene’s supervisory board will also be reduced in order to adjust to the new company size.

The company will incur a one-off restructuring charge of approximately €1m in 2010.

These measures will save at least €5m per annum and support MediGene’s ambition to strengthen its drug pipeline through a strategic transaction, the company said.

MediGene has previously announced that it will take EndoTAG-1 into Phase III development only in cooperation with a partner who will also bear the costs, and the full data package for the partnering process is now available. Several potential partner companies are in the process of conducting due diligence, the company said.

MediGene said its ability to develop its portfolio would remain unaffected by this restructuring. Core competence teams in pre-clinical development, clinical trial design and clinical development will remain and business development efforts on EndoTAG-1 and Veregen will continue.

Arnd Christ, cfo of MediGene, said: ‘These cost saving measures are part of an overall strategy to give MediGene an attractive financial profile. With this lower cost base, a solid cash-position and the royalty receipts from both Eligard and Veregen, MediGene could become profitable in 2011. However, management's intention is to seek to grow the business organically and via strategic transactions.’

MediGene is based in Martinsried/Munich, with subsidiaries in Oxford, UK and San Diego, US.

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