CAMBRIDGE, Mass. (AP) -- Biotechnology company Alkermes Inc. said Wednesday it will cut 150 jobs and close a manufacturing facility in Chelsea, Mass.
The restructuring stems from Eli Lilly & Co.'s decision earlier this month to cancel development of its AIR Insulin program, which was in late-stage clinical trials. Eli Lilly, which had been developing the diabetes drug with Alkermes, said the decision had nothing to do with safety issues. Instead, it decided AIR Insulin could not compete with existing products.
The personnel reduction, which represents about 18 percent of the company's work force, is effective this week, Alkermes said. Eliminated employees will be eligible for severance pay, continuation of benefits and outplacement services.
Alkermes does not anticipate any expense savings from the restructuring during fiscal 2008, which ends March 31, but forecasts savings of about $15 million to $20 million in fiscal 2009.
The company expects to record a restructuring charge of between $5 million and $10 million in the fourth quarter. Alkermes also estimates a fourth-quarter impairment charge of up to $15 million related to fixed assets at the closing facility.