Aegerion Pharmaceuticals, Inc.AEGR announced that it is reducing the global workforce by approximately 13%.
The move came as part of the company's strategy to reduce operating expenses, extend cash position and increase cash generation from operations in 2017.
Aegerion aims to lower its 2017 operating expenses by $25-$35 million relative to the previously stated 2016 operating expense guidance of $145-$155 million.
This workforce reduction is slated to be complete in the third quarter of 2016. The company intends to complete employee separation payments and other costs related to the restructuring by the second quarter of 2017.
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To mitigate the impact of persistent competitive pressure on the product, the company stated its plans to withdraw Juxtapid from the EU and certain other global markets by the end of 2016, unless it finds suitable partners. We note that Juxtapid is approved for the treatment of homozygous familial hypercholesterolemia (HoFH).
The company, however, intends to continue maintaining certain infrastructure in the EU to support a potential launch of Myalept (metreleptin for injection), upon an anticipated approval in late 2017.
Currently, Myalept is approved in the U.S. as an adjunct to diet as replacement therapy for the complications of leptin deficiency in patients with congenital or acquired generalized lipodystrophy.
The company will also provide financial guidance after the closing of its merger agreement with QLT Inc., QLTI . We remind investors that last month, Aegerion entered into a definitive merger agreement, under which it will combine with a wholly owned indirect subsidiary of QLT to form a global biopharmaceutical company, Novelion Therapeutics Inc. Novelion will focus solely on rare diseases. The transaction is expected to close late third-quarter 2016 or fourth-quarter 2016.
Aegerion is a Zacks Rank #3 (Hold) stock. A couple of better-ranked stocks in the health care sector are Nektar Therapeutics NKTR and Innoviva, Inc. INVA . Both stocks sport a Zacks Rank #1 (Strong Buy).
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