MediGene AG announced a significant restructuring of its business. Given the completion of both the EndoTAG(TM)-1 Phase 2 trial in triple receptor negative breast cancer and the CMC conversion from freeze-drying to spray drying, as well as the recent simplification of its Eligard® arrangements with Astellas, MediGene's management and Supervisory Board have taken the decision to right-size the business. This process will begin immediately and will include significant personnel and cost reductions. These measures will support MediGene's ambition to strengthen its drug pipeline through a strategic transaction.
Within the restructuring process, MediGene's total number of employees will be reduced from 107 to approximately 55, with the majority of the redundancies coming from the teams involved in the successful EndoTAG(TM)-1 CMC conversion process and in running and analyzing the EndoTAG(TM)-1 clinical trials. Both of these have now been completed. MediGene has previously announced that it will take EndoTAG(TM)-1 into Phase III development only in cooperation with a partner who will also bear the costs, and the full data package for the partnering process is now complete and available. Several potential partner companies are in the process of conducting due diligence.
According to the company, MediGene's ability to develop and monetize its portfolio of therapeutic assets will remain unaffected by this restructuring. Core competence teams in pre-clinical development, clinical trial design and clinical development will remain and business development efforts on EndoTAG(TM)-1 and Veregen® will continue.
In addition to these restructuring measures, at the forthcoming Annual General Meeting planned for spring 2011, MediGene's Supervisory Board and management will propose that MediGene's Supervisory Board reduced in order to adjust to the new company size.
The estimated one-off restructuring cost will incur in full in 2010 and is estimated to be approximately EUR 1 million, whereas the cost savings of the measures announced today are anticipated to be at least EUR 5 million per annum.