Abbott Laboratories notified 700 employees Wednesday that they will be out of work.
Around 300 of them worked on the company's vascular business, where a six-year-old stent co-promotion deal with Boston Scientific is winding down. Another 200 worked in the company's diagnostics division.
Under the stent deal, a legacy of the two companies' 2005 Guidant acquisition, Abbott manufactured and co-marketed its Xience stent and Boston Scientific's identical Promus stent. Boston Scientific will now take over manufacturing of its follow-on Promus Element stent.
The layoffs were announced the same day Abbott Laboratories announced that fourth quarter earnings jumped 12.3 percent, to $1.6 billion, compared with $1.4 billion for the same period in 2010.
This latest round of cuts is not entirely unexpected. Spokesperson Adelle Infante says that the 200 jobs eliminated in Illinois are part of an efficiency program that was announced four years ago. Infante says California will lose 300 jobs and Puerto Rico 100, with the remainder to be spread across Abbott locations.
Abbott Labs announced a year ago that it would cut 1,900 jobs globally due to economic weakness and health reform, among other causes. This was preceded by their 2010 announcement that they would slash 3,000 jobs by 2012.
The company's top-earning drug, Humira, which is used to treat rheumatoid arthritis, psoriasis and Crohn's disease, had $3.4 billion in domestic fourth-quarter sales and $4.5 billion in international sales.
Deutsche Bank research analyst Barbara Ryan writes in a January research note that Abbott's pipeline is sluggish and that its $7.9 billion in sales for 2011 is not enough to insulate the company, which she predicts will see its next strong seller “later in the decade.” Ryan also writes that competitors and expiring patents are eating away at the company's generics business as Tricor/Triplix go off patent in 2012 and 2014, Niaspan loses its protection in 2013, Androgel in 2015, and Kaletra in 2016.