AstraZeneca slashes US sales force by a quarterAstraZeneca is slashing its US sales force by 24% as the company confronts a steep patent cliff.
The 1,150 job eliminations come on top of 8,000 US job cuts announced in 2010 and 400 more announced in October. The London-based company declined to say where the cuts will fall or how many will come through attrition, but said in a release that employees “will be given the option to self-identify to potentially leave the company.” AstraZeneca will take a $50 to $100 million hit in restructuring costs from the cuts, which will go towards the second four-year phase of a two-step downsizing exercise, this portion initiated in 2010 and aimed at wringing $1.9 billion in cost savings through 2014.
Two of the company's three $5 billion brands – Seroquel and Nexium – are set to lose patent exclusivity in the next two years, with $5.3 billion Seroquel going off-patent in 2012, along with $2.7 billion Symbicort, and $5 billion Nexium following in 2014. The third, Crestor, which brought in $5.6 billion in 2010, already faces competition from generic Lipitor, having recently failed to outperform the Pfizer drug on plaque progression in AstraZeneca's SATURN trial, and goes off-patent in 2016. A host of substantial AstraZeneca products have lost patent protection in the past few years, including Arimidex and Casodex, Pulmicort Respules and Toprol-XL, while the company has been hit by setbacks on several key pipeline products, including Brilinta, Onglyza, dapagliflozin and Iressa. Generic competition cost the firm $1.6 billion in 2010 alone.
“We are building a leaner, more efficient US organization that will enable us to continue delivering against our mission of patient health while remaining a strong, sustainable business in the future,” said a company spokesman.
Like many of its large pharma peers, the company has also been on a share buyback tear, plunking down $2.1 billion on share repurchases in 2010, with $4 billion more planned for 2011.
In other AstraZeneca news, the firm announced its acquisition of a generics firm in China, where the company is already spending $200 million on an new manufacturing facility. The company saw more than $1 billion in sales in China last year, fueling emerging markets revenue growth of 16% while US revenues declined 7%.