Date: 2015-01-07
Type of information: Restructuring
Compound:
Company: Transgene (France)
Therapeutic area: Cancer - Oncology
Type agreement: restructuring
Action mechanism:
Disease:
Details: * On January 7, 2016, Transgene announced its new strategic development plan, as well as the securing of new financing and the completion of its restructuring program. Following the completion of its restructuring plan, launched at the end of June 2015, Transgene announced its strategy based on its strengths in the immune-engineering of viral vectors and on its expertise in pre-clinical and clinical development. Transgene will, as a priority, combine its products with other immunotherapy products, including immune checkpoint inhibitors (ICI). In pre-clinical studies, the results obtained by Transgene, as well as those reported in recent scientific journals using comparable approaches, demonstrate the potential and the rationale of combining immunotherapeutics. In strengthening the immune response through two complementary mechanisms of action, these combinations should increase treatment efficacy. Transgene has already initiated discussions with clinical and biopharmaceutical partners to start five Phase 2 clinical studies in combination with ICI’s for its two most advanced products. The first patients should be treated in mid-2016. The main combination programs are: - Combination of TG4010 with an ICI in the first- and second-line treatment of non-smallcell lung cancer (NSCLC). - Combination of Pexa-Vec with an ICI in the first-line treatment of hepatocellular carcinoma (HCC), as well as for the treatment of other solid tumors. Transgene is also strengthening its translational research capabilities through collaborations with academic institutions and hospitals. In addition to its current collaborations with the Gustave Roussy Institute in Paris and the University of Fudan in Shanghai, the Company has recently entered into a collaboration with the ICM (Institute for Brain and Marrow - Institut du cerveau et de la moëlle) in Paris in the area of neuro-oncology. Collaborations have also been initiated with the Hospital Service Frédéric Joliot at Orsay for in vivo molecular imaging and with the University of Surrey (United Kingdom) in the area of in vivo analysis, aimed at developing innovative oncolytic viruses which can rapidly progress from pre-clinical animal models to human pathology. The financing of this new strategic development plan will come from two sources, providing the Company the means to reach a number of value-creating milestones over the next two years: - A loan of 20 million euros has been obtained from the EIB (European Investment Bank) under the IDFF (Infectious Diseases Finance Facility) program. This is a 5-year loan and the principal and accumulated interest will be reimbursable only from the fourth year. The loan will be released in two tranches at the request of the Company. - Transgene has received a commitment by its major shareholder, the Institut Mérieux, to provide additional financing of around 10 million euros, confirming its support of the Company’s strategy. The restructuring plan announced in June 2015, including, notably, the Company‘s withdrawal from and outsourcing of process development and bio-manufacturing activities, is in its very final steps of completion. This plan translates into the reduction of some fifty percent of the total number of employees compared to the number at the end of 2014. The cost of the plan is estimated at around 7.5 million euros, and its impact on cash consumption will mainly be in 2016. The reduction in operating costs as a result of the plan are forecast at more than 15 million euros per year, starting this year. The reduction of its fixed costs gives Transgene both the means and the flexibility to execute its ambitious development plan, particularly in the clinic. * On June 29, 2015, Transgene announced that it has informed the representatives of the works council of the Company’s intention to modify its vertical integration model and to implement a restructuring in order to maintain its competitiveness and to ensure a sustainable future. Transgene intends to focus resources on its core business of research and development by advancing its clinical portfolio, reorganizing its research model, and outsourcing manufacturing and pharmaceutical development activities.
The Company will apply its resources to advancing its clinical portfolio, as well as on research and development, particularly translational research. The Company plans to continue to develop innovative immunotherapies for cancer and infectious diseases by further developing its technology platforms. The Company’s strategy is to increase collaborations with academic institutions and hospitals, as well as with biopharmaceutical partners, with partnerships occurring at an earlier stage of product development.
In this context, it is no longer strategic for Transgene to keep its stand-alone pharmaceutical development and bio-manufacturing capabilities. Thus, the planned restructuring would lead to the Company’s terminating such activities, which is expected to result in the loss of approximately 120 positions, mostly in manufacturing and pharmaceutical development and also in support functions. In accordance with the values of its principal shareholder, Institut Mérieux, Transgene is committed to by all means minimizing as much as possible the social impact of the restructuring plan, giving top priority to finding new positions in other Institut Mérieux companies for affected employees. The aim is to leave no one without a solution. Furthermore, as part of the Employment Safeguard Plan (Plan de Sauvegarde de l’Emploi, a mandatory process under French labor law), Transgene has received a proposal from ABL, Inc., a U.S. subsidiary of Institut Mérieux, under which ABL would offer, in Illkirch (France), positions to a significant number of Transgene’s employees involved in manufacturing and related activities. Negotiations have been launched with employee representatives in order to discuss and finalize the plan, in accordance with French law.
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