The job-cutting ax has been hovering over Kythera Biopharmaceuticals ever since Allergan ($AGN) agreed to buy the company in April. Now, that ax is getting ready to fall.
According to a notice filed with the state of California, Kythera will lay off 117 employees at its Westlake Village, CA, headquarters as of Nov. 30. The cuts include top Kythera executives--including CFO, CMO and chief commercial officer--and lower-level employees across the company, from HR and operations to R&D and manufacturing. Allergan closed on its purchase of the company on Oct. 1.
The layoffs amount to more than half of Kythera's work force as of June 30, the Los Angeles Business Journal reports. In a second-quarter filing with the Securities and Exchange Commission, the company said it had 218 employees.
|Allergan CEO Brent Saunders|
Merger-related layoffs aren't uncommon, and soon after the deal was announced, Allergan said it would be cutting jobs at Kythera as it integrated the company into its own operations. CEO Brent Saunders said at the time that Allergan would keep "the vast majority" of the deal target's employees.
Though some high-level sales and marketing managers will lose their jobs, including the chief commercial officer and the VP for U.S. sales, Allergan has said it would keep much of the sales force intact. Kythera is in the midst of a product rollout--the double-chin injection Kybella--and Allergan has high hopes for that launch.
Kybella could not only be a major product in itself, but could also add oomph to the rest of Allergan's aesthetic product line, partly via cross-selling, and partly as an entry-level product for men. "Keep in mind, we don't plan on eliminating any sales reps," Saunders said when the deal was announced, adding that Allergan planned to "integrate the Kythera reps after closing into our sales force."
The Westlake job cuts follow more than 1,000 for Allergan in California over the past year, first as the company fought off a buyout by Valeant Pharmaceuticals ($VRX), and then after its merger with Actavis.
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