A mere fortnight after the completion of Biogen’s acquisition of Reata Pharmaceuticals, the newly merged entity is taking a scalpel to its workforce. Reata recently issued a Worker Adjustment and Retraining Notification (WARN) to Texas state officials, revealing plans to cut 113 positions, effective the following month.
At the start of the year, Reata had 321 employees, as per an annual SEC filing. Consequently, these layoffs are poised to affect roughly a third of the acquired company’s workforce. Biogen’s acquisition of Reata, which included the promising Skyclarys, a drug approved by the FDA for treating the rare neurological disorder Friedreich ataxia, was sealed in September. Biogen’s CEO, Chris Viehbacher, initially expressed plans to leverage the expertise of his company’s commercial teams for marketing Skyclarys alongside their existing drugs, Spinraza for spinal muscular atrophy and the newly approved Qalsody for amyotrophic lateral sclerosis.
Also Read: Biogen Buys Reata And Skyclarys For $7.3B, Cuts Jobs
The announced cuts primarily target roles where there are synergies with Biogen, particularly in general and administrative services, along with some development positions, according to a Biogen spokesperson. The spokesperson emphasized the retention of employees who played a pivotal role in the Skyclarys launch to ensure uninterrupted patient support.
Ironically, as Biogen expanded through the Reata acquisition, it concurrently initiated layoffs within its own ranks. Over the summer, Biogen disclosed plans to eliminate approximately 1,000 jobs by 2025, a move aimed at saving hundreds of millions of dollars annually.
This trend of biopharma companies engaging in acquisitions and promptly implementing staff reductions isn’t isolated to Biogen. CSL Vifor, following Australia’s CSL’s $11.7 billion purchase of Vifor in August, unveiled its intention to trim 85 California-based staff by October’s end. After the merger, a strategic review led to changes within CSL Vifor’s U.S. commercial group.
Also Read: September Layoffs: A Recap Of Recent Workforce Reductions In Biotech And Pharma
Gilead Sciences and Merck & Co. also followed this pattern in 2022. Gilead, last March, announced its plan to lay off over 100 Immunomedics employees at the company’s former headquarters, a consequence of Gilead’s $21 billion acquisition years earlier. Merck, likewise, downsized a group of Acceleron employees in Cambridge, Massachusetts, only months after securing an $11.5 billion deal for the Boston-based developer of sotatercept, a groundbreaking therapy for pulmonary arterial hypertension.
