The drugmaker is also cutting 114 jobs amid anger from shareholders who are unhappy about the slowing growth of the Tysabri multiple sclerosis drug, a 64 percent stock decline this year, decentralized management in far-flung offices and accusations of a lax approach to cost cutting and corporate governance.
And so Ireland's biggest drugmaker is eliminating about 7 percent of its workforce and closing offices in New York and Tokyo in hopes of savings $25 million annually. No word, though, on whether ceo Kelly Martin (pictured left) will end all those flights on corporate jets that have also irritated shareholders or relinquish a bonus to save money (back story and Elan statement).
The move also follows the failure to sell the EDT drug-technology division, which was apparently nixed by the credit crunch, Bloomberg News notes. By the end of this month, Elan will have $450 million in cash and investments, while $1.15 billion in debt comes due in 2011.
"That EDT sale would have put them in a nice cash position to develop their Alzheimer’s pipeline,” Goodbody Stockbrokers analyst Ian Hunter tells Bloomberg. “They need to conserve as much cash as possible now.” He estimates the EDT unit is valued from $1 billion to $1.3 billion.
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Thought you would be interested in my letter to the Elan Chairman. The behavior of this CEO and Chairman is remarkable Major Shareholder Jack W. Schuler Calls for Termination of Elan CEO I don't know how to send this to you, but you can find it on the yahoo message board