February 06, 2007
AstraZeneca to trim staff by 3,000
AstraZeneca announced plans to eliminate 3,000 jobs, or 4.6% of its workforce, over the next three years, as it reduces expenses to counter generic competition. The Anglo-Swedish drugmaker provided few other details about the cuts, only stating the eliminations would occur in the supply chain and that the company still needs to talk with unions and staff about the reductions. The company is planning to take $500 million in charges to pay for the job cuts, of which $300 million will be in cash. AstraZeneca employs over 65,000 people worldwide, according to its Web site. The job reductions come following a year of setbacks for AstraZeneca. Sales of the drugmaker’s Toprol-XL hypertension drug are on the decline due to competition from generic versions and the company was forced to stop development of its blood thinner Exanta, stroke treatment NXY-059 and Galida for diabetes. During the company’s fourth quarter earnings call, CEO David Brennan said AstraZeneca’s focus remained on strengthening its weak drug pipeline. “More remains to be done,” Brennan said. “We are determined to maintain the sales momentum or our current product portfolio and to continue to build a pipeline to sustain our growth, while driving further productivity improvements and enhancing cash returns to shareholders.” During the call, AstraZeneca also announced a $150 million cash deal to acquire Arrow Therapeutics, a privately owned UK biotechnology company focused on the discovery and development of anti-viral therapies. The transaction is expected to close in early 2007. Anti-viral programs in development by Arrow include several different approaches toward Hepatitis C virus and respiratory syncytial virus. Last month, AstraZeneca announced a collaboration deal with Bristol-Myers Squibb worth $1 billion to develop and commercialize two investigational compounds for Type 2 diabetes. The compounds are saxagliptin, a dipeptidyl peptidase-4 inhibitor currently in Phase III development, and dapagliflozin, a sodium-glucose cotransporter-2 inhibitor currently in Phase IIb development. Both compounds were discovered by Bristol-Myers Squibb. AstraZeneca in January also announced plans to expand work in infectious disease and cancer research with a $100 million expansion of its R&D center near Boston. The company has also stepped up its consumer promotion behind currently marketed products. AstraZeneca outspent rivals Pfizer and Merck by 30% on consumer advertising for Crestor, helping the drug become the fastest-growing cholesterol treatment, Bloomberg.com recently reported. AstraZeneca spent $166.5 million on Crestor TV, print and radio promotion to consumers in 2006 to November, the Web site reported, citing data from Nielsen Monitor-Plus. That number compares with $128 million spent by Merck on Vytorin and $104 million spent by Schering-Plough on Zetia. Crestor is taking Pfizer’s Lipitor, the top-selling cholesterol-lowering treatment and the world’s best-selling prescription medicine, with 2006 global sales of $12.8 billion. Pfizer spent approximately $18 million on consumer advertising for Lipitor in 2006 to November, with sales gaining 15% in the third quarter. During the third quarter of 2006, Crestor sales rose 64% to outpace Vytorin, according to Bloomberg.com.