Icos gives layoff notices to 300

By Luke Timmerman

Seattle Times business reporter

More than 300 of the 500 employees at Icos in Washington state have been given layoff notices as Eli Lilly prepares to take over the company, and the rest will find out in coming weeks whether they still have jobs.

The latest round of cuts brings the layoff tally so far to nearly 500 out of 700 jobs at the Bothell company.

The Indianapolis-based pharmaceutical giant, which struck a deal last month to buy Icos for $2.1 billion, still has not revealed its plans for workers in three departments: operations, research and contract manufacturing.

Earlier this month Lilly cut about 180 Icos sales and marketing staffers based around the country. The national sales reps in that group, who pitch the impotence drug Cialis to doctors, are being invited to apply for jobs at Lilly, said Icos spokeswoman Lacy Fitzpatrick.

The cuts at the region's largest locally based biotech company have gotten the attention of Gov. Christine Gregoire, who, on Monday sent a letter to Eli Lilly Chief Executive Sidney Taurel. Her letter did not challenge the layoff decision but invited Taurel to cooperate with state and local officials during the takeover.

"To ensure the best possible outcome," the governor wrote, "I encourage you to work closely with Icos management, Snohomish County officials, and my office."

Many of the local employees are getting 60-day layoff notices, while others are being asked to stay through the transition period.

The cuts come from a variety of departments, including clinical, finance, legal and information technology.

None of these laid-off employees has been offered jobs at Lilly or transfers to Indianapolis, Fitzpatrick said. Workers are being offered outplacement services and undisclosed severance packages, she said.

The layoffs are all contingent on the takeover being finalized. A special shareholders' meeting is scheduled Dec. 19 at Icos headquarters in Bothell, and the companies expect the deal to close soon after.

When the acquisition was announced, Taurel said there would be "significant" job cuts in Bothell, and that Cialis would help boost his company's profits by 2008.

Kristin Jacobsen, a spokeswoman for Gregoire, said it is unusual for the governor to send a letter directly to an acquiring company's CEO. So far, there's been no response.

Deborah Knutson, president of the Snohomish County Economic Development Council, said her agency and the Snohomish Council Workforce Development Council are offering help to the laid-off workers.

She also hopes to discuss with company officials their plans for Icos' manufacturing plant, which makes biotech drugs under contract.

If Lilly doesn't plan to keep that facility, Knutson said, she hopes her agency can help market it to another company. Plants that can manufacture genetically engineered protein drugs are expensive and time-consuming to build.

"What they have is a really valuable asset," Knutson said, adding, "All the brainpower that's leaving the company, we'd like to find a way to keep it in the county."

Luke Timmerman: 206-515-5644, ltimmerman@seattletimes.com