Big cuts for AstraZeneca sales force
AstraZeneca is slashing its US sales force by 24% as it confronts a steep patent cliff.
The 1,150 job eliminations follow 8,000 US job cuts announced in 2010 and 400 more announced in October. The company did not say where the cuts will fall or how many will come through attrition.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 trimming $1.9 billion in costs 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, faces competition from generic Lipitor, having 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—including Arimidex and Casodex, Pulmicort Respules and Toprol-XL—have lost patent protection in the past few years, and the company has been hit by setbacks on such key pipeline products as Brilinta, Onglyza, dapagliflozin and Iressa. Generic competition cost the firm $1.6 billion in 2010.
“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,” 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 a 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%.