Job losses mounting at smaller drugmakers
pharmafile | February 5, 2009 | News story | Sales and Marketing | restructure
Another week, and another swathe of job losses across the pharmaceutical sector, with sales and back office staff once again in the firing line.
While the thousands of staff cuts expected at Pfizer/Wyeth, GlaxoSmithKline and AstraZeneca have captured the headlines, there have also been a steady stream of restructuring announcements from small and medium-sized companies.
Latest to go public with its plans is Allergan, which announced a reduction in its global workforce by 5%, or around 460 employees, in its quarterly results statement yesterday. The cuts will mainly target the company's US urology sales force, as well as marketing personnel in the US and Europe, and comes on the back of a reduction in its earnings forecasts for fiscal 2008.
Also cutting back is King Pharmaceuticals, with 760 employees losing their jobs, or around 22% of the firm's entire workforce. King blamed the recent loss of US patent protection on its muscle relaxant Skelaxin (metaxolone) for the cuts, which affected mainly its salesforce and back office positions. The company has also been suffering from delays in approval of its opioid analgesic product Remoxy (oxycodone).
US drugmaker, Sepracor, said late last week it was cutting 20% of its staff – or around 530 jobs – in a bid to save $210 million in operating expenses through to the end of 2009. Once again the salesforce bore the brunt, with 350 jobs going. The remaining 180 positions are corporate staff.
Biotech company Hollis-Eden Pharmaceuticals is eliminating 20 jobs, a third of its workforce, and will also freeze salaries and suspend bonuses as it tries to eke out scarce financial resources. The cut in its burn rate will allow it to keep operating for two years without tapping equity markets.
Another biotech firm, Rigel Pharmaceuticals, has cast 20% of its staff adrift – 36 employees – and exited from some research areas to conserve cash. The company is trimming down as it awaits phase IIb results for rheumatoid arthritis drug R788, its lead drug candidate.
And a third of the headcount will be laid off at Alexza Pharmaceuticals in a bid to reduce expenses by around $21.5m in 2009 and $11m in the following year. 52 jobs are to go, it said. Alexza's intention is also to preserve funds to allow operations to continue while it brings its lead product through development. Lead drug candidate AZ-004 is in phase III trials as a treatment for agitation in patients with schizophrenia or bipolar disorder.
Meanwhile, back at the Big Pharma end of the spectrum, Abbott Laboratories said it is cutting 200 sales jobs as a direct result of failing to get approval for a controlled-release formulation of its longstanding painkiller Vicodin (paracetamol and hydrocodone). US regulator the FDA turned down Vicodin CR last October.
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