Vertex Pharmaceuticals Inc. will cut about 370 jobs globally, including 175 in Massachusetts, because sales of Incivek -- its hepatitis C drug -- are declining faster than initially anticipated.
Affected employees are being told Tuesday at Vertex sites and field offices around the world that they are losing their jobs. The move will reduce the company’s workforce by about 17 percent worldwide and 11.8 percent in its home state. It is the first major round of layoffs in the past decade for Vertex, which has been one of the state’s fastest growing and highest profile biotechnology companies.
After the job reductions, Vertex will have about 1,800 employees worldwide, including 1,300 in the Boston area. But executives said they are still planning to go forward with a long-planned move from 11 buildings scattered across Cambridge to a new headquarters complex at Fan Pier on the South Boston waterfront -- a process that will begin soon.
Because of the cuts, company officials said, Vertex will return $4.4 million in tax incentives it received from the state for creating jobs in Massachusetts.
Vertex leaders are scheduled to brief stock analysts Tuesday on the sharp sales drop for Incivek and on plans to refocus the biotechnology company on cystic fibrosis therapies as well as drugs in earlier stages of development to treat multiple sclerosis, cancers, and other diseases.
The company last year won approval for its second drug, Kalydeco, which treats roughly 4 percent of the 75,000 patients worldwide suffering from cystic fibrosis, a rare and often fatal genetic disease. Vertex is working on new versions of Kalydeco and combination medicines that, within three to five years, could be available for up to 90 percent of cystic fibrosis patients.
Chief executive Jeffrey Leiden said in an interview that Incivek -- the first drug developed solely by Vertex -- has been a commercial success, treating more than 100,000 patients around the world who have the viral infection and generating more than $2 billion in revenue.
But the company hired its Incivek sales force anticipating revenue would remain strong for several more years, he said. Instead, many doctors are advising patients to hold off on taking Incivek, a pill used in combination with another drug that has to be injected, because a new generation of all-oral hepatitis C therapies could be available from at least one rival drug maker as early as next year. Vertex is also working on an all-oral drug regimen to treat the disease, but it is still in clinical trials and won’t be ready for several years.
“Hepatitis C is an area where innovation has moved so fast that new drugs are coming onto the market,” Leiden said. “We built the organization assuming Incivek was going to be an important market for at least three to five years. It’s turning out to be more like two to two and a half years.”
Indeed, sales data released with the company’s quarterly earnings report Tuesday show sales of the pill tumbled to $86 million for the third quarter of 2013, from $156 million in the second quarter. By comparison, the drug rang up third-quarter sales of $254 million in 2012 and $420 million in 2011 shortly after it hit the market.
“What you’re seeing is rapid innovation leading to the reshaping of the company,” Leiden said. “But the overall trajectory is one of growth.”