Layoffs Continue in Pharma in November
November 21st, 2013 // 4:09 pm @ jmpickett
Earlier in 2013, Merck, Astrazeneca and Eli Lilly announced restructuring that has led to disappearing jobs. Much of the cuts were related to poor clinical trial results and revenues that were dropping because of generic competition.
This week, Novartis, Bristol Myers Squibb and Ariad have announced that they also are cutting jobs.
At Novartis, the Boston Globe reported last week that the company will cut 500 international research jobs as it cuts a site focused on respiratory research. It also is cutting an oncology program and a dermatology program. The layoffs are one aspect of a big restructuring program that is going to cuts some of Novartis’s R&D expenses, which were $2.4 billion in Q3. These cuts are coming after a quarter that was fairly disappointing for Novartis, with operating income dropping by 2%.
Novartis plans to add 175 jobs to its HQ in the Boston region. This consolidation should help to cut costs as the company tries to fill its later state pipeline with new products such as serelaxin and ruxolitnib.
Bristol Myers Squbb recently announced its own restructuring, with 1% of R&D costs being cut and 75 jobs. The jobs are going to be cut in diabetes early discovery, hepatitis and neuroscience. The one area that will not be cut is in the immunotherapy area, where a new Alzheimer’s drug looks promising.
At Aria, that firm got a big FDA blow recently when the agency asked that it stop selling the leukemia drug Iclusig. A clinical study indicated that there were a high number of blood clots in patients.
Aria now is going to be forced to deal with a cripple drug pipeline, while dealing with the loss of a big source of its revenue.
Recent reports state that Aria has to cut costs if it wants to stay in business. To do this, it may need to cut 40% of its workforce in all areas. That would save the firm $26 million next year.
Overall, it has been a good year for biotechnology, but big pharmaceutical companies are struggling with the looming patent cliff and higher R&D costs.
