Compared to robust activity in the medical device sector, the eight biggest drugmakers with headquarters or significant operations in Orange County reported lackluster local employment of 2,153 in the year ended July 31, down nearly 20%.
Rankings shifted due to Peregrine Pharmaceuticals dropping off the list.
Numbers are Business Journal estimates for half of the companies since they didn’t provide employment figures.
Top-Level Changes
• No. 1, Allergan PLC (NYSE: AGN), cut local operations over the past two years. It stumbled several times over the past year; the first misstep was the announcement of a patent deal with the Saint Regis Mohawk Tribe in New York. The transaction, originally intended to leverage the tribe’s sovereign immunity to protect patents on top-grossing dry-eye drug Restasis in two court systems, backfired badly.
On top of falling from investors’ favor, Allergan received an unfavorable court ruling last year that invalidated Restasis exclusivity protections.
Executives say they anticipate generic competition this year. Allergan announced in January plans to cut over 1,000 jobs, or more than 5% of its workforce, and eliminate 400 vacant positions, in order to cut costs due to new competition for its second-most important drug.
The company, now headquartered in Parsippany, N.J., but with significant operations in Irvine, didn’t respond to a Business Journal inquiry on the cuts’ local impact, but it plans to vacate and sell three offices at its Irvine campus totaling about 90,000 square feet (see related story, page 3).
• Dendreon Pharmaceuticals LLC remained flat at 194 employees, nevertheless jumping from sixth to tie at fourth. The regenerative medicine maker is thriving under its new owner, Nanjing-based Chinese conglomerate Sanpower Group Co.
Chief Executive James “Jim” Caggiano said it plans to establish operations in China with “the ultimate vision that I will be CEO of Dendreon U.S., and once [the] Provenge [drug] is approved in China, maybe there will be a Dendreon Asia CEO,” he told the Business Journal in an earlier interview. The prostate-cancer therapy received Food and Drug Administration approval in 2010.
Dendreon filed for bankruptcy and was acquired by Valeant Pharmaceuticals in 2015 for $495 million, then sold again two years later to Sanpower for $819.9 million.
As part of the sale, it moved its headquarters from Bridgewater, N.J., to Seal Beach, where it also operates manufacturing. It has another factory in Georgia, and a facility in Seattle that houses transportation and logistics operations.
Generic Factor
• Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) remains second place with 316 employees. The Israeli-based company became one of the world’s biggest generic drugmakers when it bought Allergan’s generic drug arm two years ago for nearly $40 billion.
The move added $35 billion in debt; pricing competition also put pressure on its core generics business.
In December, it announced a 14,000-worker cut across global operations over two years, most this year. Chief Executive Kare Schultz, who joined a year ago, said in a letter to employees that the restructuring is “crucial to restoring our financial security and stabilizing our business.”
Last week, Teva announced a $400 million debt tender offer that expires Oct. 1, according to Securities and Exchange Commission filings.
• Depreciated generic drug prices also hit another generics maker hard. Par Pharmaceuticals Inc. in Irvine was down more than 7% to 278 employees but moved from fourth to third.
It’s part of Endo International PLC’s companies that include branded pharmaceuticals maker Endo Pharmaceuticals and Paladin Labs, which makes pharmaceutical products for the Canadian market.
• Irvine-based generic drugmaker Stason Pharmaceuticals Inc. also cut employment. It’s still eighth with 54 employees, down from 70.
Peregrine Unranked
• Tustin-based Peregrine Pharmaceuticals fell off the ranking. It previously developed a clinical-stage immunotherapy cancer drug candidate but now operates as Avid Bioservices Inc. (Nasdaq: CDMO), a pure-play contract development and manufacturing organization that develops biologics for other drug companies.
Peregrine ranked third last year when it still funded research and development of the drug through cash-generating biologics manufacturing subsidiary Avid. It began restructuring after certain investor groups issued a public statement last summer calling for it to cease clinical development of the drug and focus on growing Avid.
Peregrine announced the name change in January and about a month later sold the cancer drug to Boston-based Oncologie Inc.
It also revamped its executive team and board. Roger Lias, who joined the company a year ago as Avid president, leads the company as president and chief executive, replacing Steve King, who resigned in December.
Settling In
• Local employment growth was a tepid 1% at No. 4, Avanir Pharmaceuticals Inc. in Aliso Viejo, and flat at the Irvine operations of No. 6, Spectrum Pharmaceuticals Inc., and No. 7, Bausch Health Companies Inc., formerly Valeant Pharmaceuticals International Inc.
Avanir, which develops drugs for central nervous system disorders, was acquired in 2015 by Japanese drugmaker Otsuka Pharmaceutical Co. for $3.5 billion.
Valeant changed its name in July. It also introduced a new corporate brand identity and website, and will trade under the new stock symbol BHC.
Chairman and Chief Executive Joseph Papa said the name change hearkens to “when J.J. Bausch opened his first optical goods shop more than 165 years ago” and embodies “the rich history of innovation, fortitude and dedication to patient health … the foundation of who we are today as we continue to build.”
The name allows the company to leverage the Bausch & Lomb brand, the better-known and respected eye-care subsidiary bought in 2013. It hopes to distance itself from the Valeant identity as a drug-rights acquirer that drastically raises prices afterward.
