Switzerland-based Actelion (ALIOF) recently announced that approximately 135 employees of the company could be shown the door following the cost saving initiative launched by it. The initiative is directed at increasing efficiencies so that the available resources can be utilized optimally. Moreover, by undertaking the initiative, Actelion aims to combat challenges such as the continued strength of the Swiss Franc, excessive competition in the US and pricing and reimbursement issues in Europe.
Actelion stated that that the cost saving initiative was a part of the company’s strategy for value creation outlined in May 2012. The cost-cutting initiative should enable the company to focus more efficiently on its major area of strength – pulmonary arterial hypertension (PAH).
We note that three (Tracleer, Ventavis and Veletri) of Actelion’s four marketed products are indicated for the treatment of PAH. The fourth drug, Zavesca, is indicated for the treatment of Gaucher’s disease.
Actelion further stated that the savings will materialize towards the end of the year and gain pace next year. All the job cuts arising from the cost cutting initiative will be in the research & development (R&D) wing of Actelion. The streamlining is aimed at cutting down R&D expenditure.
Actelion, which will disclose its earnings results for the first half of 2012 on July 19, further stated that it intends to direct its R&D activities for developing orphan and specialty indications going forward.
We remind investors that Actelion was in the news recently when the company and its partner Auxilium Pharmaceuticals, Inc. (AUXL) gained approval in Canada for their drug Xiaflex for the treatment of Dupuytren's contracture in adults with a palpable cord.
Actelion carries a Zacks #3 Rank (Hold) in the short-run.
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