Dozens of jobs to go as Medivir abandons East of England
Swedish biotech Medivir is to completely shut down and move out of the East of England by the middle of 2007 in a streamlining exercise aimed at taking the company into profitability.Forty-eight jobs in all will go from the region and a net total of 30 across the entire Medivir group following a Sweden-based recruitment process to be conducted next year.
Just two years after moving into bespoke facilities at Chesterford Research Park, Medivir says its decision to consolidate all its research operations at its Huddinge headquarters in Sweden will save the firm around £3.7 million each year.
Since Medivir acquired Cambridge-based Mimetrix from Peptide Therapeutics in 2000 and established Medivir UK, the company has integrated the protease inhibitor technologies into the entire group, building an integrated research organisation.
The drug projects initiated off the back of these protease inhibitors have been key to proving Medivir’s commercial value, particularly in relation to the two protease inhibitor deals that have been signed with Tibotec concerning Hepatitis C and HIV. However, both these projects were developed by Medivir’s Swedish research unit.
Medivir believes It has now reached a stage where it can fully concentrate all research operations to Sweden, while maintaining the same development rate. This restructuring effort is expected to lead to annual cost savings of more than 50 million SEK (£3.7m) after incurring one-time costs of around 25 million SEK (£1.9m).
Once the necessary recruitments have been made in Sweden, the group expects to lower the number of full time equivalent staff by 30. Restructuring will begin as soon as negotiations with the employee organisations are completed and are estimated to be completed in the first six months of 2007.
As well as eliminating duplicated functions across the company, Medivir will transfer some of its resources from explorative research to established drug projects. Medivir’s clinical projects are run exclusively from Sweden and the resources for these projects will not be affected by the restructure.
Medivir also plans to raise 225 million SEK (£17m) through a rights issue that will allow it to increase its focus on phase III-project Lipsovir® – a treatment for labial herpes – and other ”promising” pre-clinical projects.
Lars Adlersson, Medivir’s CEO, said: “By and large, we have completed the road map that we presented at the time of our share issue in 2004. We have a more efficient organisation and some very promising projects.
“We can now take the next step and focus our resources on moving these projects forward. With the added funds that the share issue brings, we can move considerably closer to our goal of becoming a profitable pharmaceutical company.”