Wednesday, March 19, 2008

Alkermes to lay off 150, close Chelsea plant

Cambridge biotech Alkermes Inc. is laying off 150 workers and closing a plant in Chelsea after drug giant Eli Lilly & Co. ended its partnership with the firm to develop inhaled insulin earlier this month, officials report.

The news confirmed the fears of Chelsea city officials, who last week were still awaiting word on the future of the Alkermes operation there.

Last year the biotech said it would expand the Chelsea plant, which it opened in 2003, with support from Indianapolis-based Eli Lilly, to increase production of its experimental inhaled insulin. As reported previously by Mass High Tech, Lilly revealed March 7 that it had decided to terminate clinical trials of the inhaled insulin because of market concerns.

Alkermes said it expects to take a restructuring charge of $5 million to $10 million due to costs to reduce its staff and expenses from its facilities, as well as up to a $15 million charge related to fixed assets at the Chelsea plant. Both charges are expected to be taken during the fourth quarter 2008.

With 830 workers as of December 2007, Alkermes reported net income of $9.5 million on revenue of $239.97 million. The firm produces treatments for alcohol dependence and schizophrenia.