Nearly 70% of Akcea's workforce is on the chopping block as Ionis executes major restructuring
About half a year after reabsorbing its lipid-focused spinout Akcea, Ionis is now putting a major reorganization plan in play — one that involves shaving nearly 70% of the subsidiary’s workforce and expanding its distribution deal with Sobi.
Akcea began as a wholly-owned subsidiary back in 2014, before Ionis put about a quarter of its shares on the public markets. In its 2017 public debut, Akcea raised $125 million, plus another $50 million in a private placement with Novartis. Then in August, Ionis paid about $500 million — $18.15 per share — to buy that quarter back.
Ionis has long been laser-focused on R&D, inking partnerships to commercialize any drugs that might clear regulators — which was part of the company’s thinking in spinning out Akcea. But in the last couple years, particularly since CEO Brett Monia was appointed in 2019 and amid blockbuster revenues from Spinraza, the pharma has begun to put more focus on the commercial side.
“For years we have been recognized for our excellence in research, early drug development and scientific innovation,” Monia wrote back in December ahead of the company’s Investor Day. “We will now add to this by building a strong and efficient commercial organization of equal excellence. All of which will provide substantial benefit to patients and shareholders for years to come.”
The CEO shared in the filing that Sobi would distribute two of its drugs in Europe: Tegsedi, for polyneuropathy (a condition where multiple peripheral nerves become damaged) in adults with hereditary transthyretin amyloidosis; and Waylivra, for familial chylomicronemia syndrome, a rare genetic disorder.
The FDA rejected Waylivra back in 2018, flagging several concerns including the risk of serious bleeding and low blood platelet count. Tegsedi and Waylivra have been commercial disappointments so far, earning Ionis just $70 million in 2020, up from about $42 million in 2019.
On Tuesday, Ionis said it expanded its deal with Sobi to include Tegsedi distribution in North America. And as a result, it’s cutting 70% of Akcea’s staffers in the US and Canada, primarily those working on Tegsedi, to “better align with the immediate needs of its business … and to focus on high priority programs.” That includes IONIS-TTR-LRx, which inhibits the production of transthyretin, the same protein targeted by Tegsedi.
The restructuring will cost Ionis between $11 to $14 million, according to an SEC filing. The company expects to save up to $50 million a year beginning in 2022 due to the expanded Sobi agreement, it said in a statement.