Elan chops 130 jobs but keeps private jet
Elan told Outsourcing-Pharma that around half of the job cuts affected research and development (R&D) staff at its facility in San Francisco, US.
An Elan spokesperson said:"In a highly competitive market where resources are limited, we have a responsibility to continually evaluate our programs so that we remain efficient and focused on the best opportunities for patients and investors.”
He went on to that: “Even after the actions, we will have a significant, productively-engaged R&D staff in San Francisco.”
Jet setting executives deliver news
According to Reuters, Elan’s board was informed of the job cuts after company executives flew back to New York from San Francisco by private jet, much to the distaste of the company’s investors.
The company’s investors have previously voiced concern over Elan’s “excessive” use of private jets used to travel to its facilities spanning three continents. Investors have also criticised the firm for its part ownership of a NetJets Gulfstream G-400 jet, as recorded by the Federal Aviation Administration.
Matt Strobeck, an investor from Westfield Capital Management Company, which holds 19.7 million Elan shares, told the newswire: "I'm very disappointed that these guys are flying around in private jets.”
He added:"The company's science is terrific, but this diverts much-needed cash from research and development.”
Cost-cuts to replenish profits
The firm also said other cost-cutting measures must be taken as a result of research setbacks and an accounting scandal which have made it a struggle to record net profits since 2002, reported AP.
Elan announced in October last year a loss of $43.6m in the third quarter as it paid down debts, reduced R&D costs and focused on increasing sales of its multiple sclerosis drugs.
The company spokesperson said he hopes the latest job cuts will help the firm remain efficient.
“Elan has maintained a multi-year objective to become a profitable, sustainable and self–funding biotechnology company by the end of 2011 – a goal we are well on target to achieve,” he said.
