San Diego diabetes drugmaker Amylin Pharmaceuticals (NASDAQ: AMLN), under pressure to cut costs, said today it plans to lay off 200 sales representatives, or 11 percent of its total worldwide workforce. But it’s unclear if that will be enough to appease dissident shareholders Carl Icahn and Eastbourne Capital Management, which together own a 22 percent stake in Amylin.
Just two weeks ago, Amylin Pharmaceuticals’ lead director James Wilson asserted that Icahn wanted to make draconian cutbacks, and that Icahn was calling for a quick sale of Amylin to Eli Lilly, its drug-marketing partner. In his April 20 letter to Icahn, Wilson said Icahn was calling for an immediate 30 percent cut—beyond the 16 percent savings Amylin realized after laying off 340 employees at the end of 2008. Wilson made it sound like cuts of that kind would go too deep. “We believe additional cost cuts of 30 percent from our current budget would undermine our efforts to develop, prepare for and launch exenatide once weekly, which represents a major transformational opportunity for the treatment of Type 2 diabetes,” Wilson wrote.
The current round of cuts result from Amylin merging its primary care and specialty sales forces into a single organization, a move that will reduce its sales force by about one-third, or 35 percent. The company now has about 1,800 employees worldwide, said Amylin spokeswoman Anne Erickson. Amylin said the resulting field sales organization will include 325 sales reps focused on endocrinologists and primary care physicians. The company estimates that restructuring its sales force will save roughly $45 million next year, and each year thereafter. Check our update of San Diego’s tech layoffs here.
In a statement, Amylin CEO Dan Bradbury said, “Today’s actions are in line with our stated goal of achieving positive operating cash flow by the end of 2010, while continuing to position the company to increase sales of Byetta and Symlin and bring exenatide once-weekly to market as quickly as possible.”
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