Takeda was unambiguous about the importance of cost synergies as a driver of its $5.2 billion buyout of Ariad, mentioning it six times when it announced the deal in January. Those now come into play as the Japanese drugmaker trims about 180 jobs in the Boston area.
Takeda said that about 120 of the roughly 300 Ariad employees who worked at the Biotech’s Cambridge headquarters have been absorbed into Takeda, while the other roughly 180 workers got notices last month that they would be let go between mid March and the end of the year with the vast majority leaving in the summer.
“As you know, companies that come together often have overlapping job responsibilities. This is the case with Ariad,” said Amy Atwood, director, global oncology public relations at Takeda. “We took some time to make sure we made thoughtful strategic decisions.”
She said 50 of those let go could get spots at PRA, its contract research venture. The others have been encouraged to apply for jobs throughout the Osaka, Japan-based drugmaker’s global operations and are being given priority consideration.
Cuts, of course, are not new to Ariad, which a year ago, whacked 25% of its total workforce--about 90 staffers--in an ongoing restructuring of the business.
Cost savings from synergies, while important, were just one piece of the the deal for which the paid a 74% premium to Ariad shareholders.
The primary targets were Ariad’s approved leukemia drug Iclusig, which brings immediate revenues to Takeda, and its late-stage ALK-inhibiting lung cancer drug brigatinib, which was granted an FDA priority review and is set for a decision April 29.
Ariad’s Iclusig is seen as a good complement to Takeda Oncology, which has an expertise in blood cancers, and Ariad’s brigatinib can help Takeda achieve its goal of moving into other cancer areas. It has been deemed a “likely best-in-class ALK+ inhibitor” by at least one analyst. The two drugs have been forecast to reach $2 billion in U.S. sales next decade.
Analysts see Iclusig alone as a $500 million-plus product at peak, but much of its growth so far has been from repeated price hikes. Those hikes caught the attention of frequent drug price critics Sen. Bernie Sanders and Rep. Elijah Cummings. They have demanded documents about Iclusig’s sales numbers and pricing decisions.
Since then Takeda CEO Christophe Weber has joined some of his pharma peers in saying that the company is committed to taking only single digit price increases on its drugs.