Very Bad Week of Job Cuts – 5 Big Pharma giants announced layoffs
Nearly a half dozen pharma giants are ending the year on a sour note—at least for their workers.
Five massive companies that hold a combined market cap of more than $228 billion—Mylan MYL 3.15% , Eli Lilly LLY 1.52% , Endo Pharmaceuticals ENDP 3.50% , AstraZeneca AZN 2.82% , and Sanofi SNY -0.47% —announced major restructurings and layoffs in the past week, driven by a number of factors ranging from clinical trial failures to wringing off dead weight in the face of flaccid sales.
Here are the firms telegraphing these upcoming job cuts.
While Mylan MYL 3.15% has mostly been in the news over its controversial and steep price hike for the EpiPen, it’s also had a busy year of M&As. And deals can foster redundancies that companies are eager to lop off.
The company announced in a regulatory filing earlier this week that it would cut “less than 10%” of its U.S. Details are still sparse, and Mylan declined to comment on the matter further, but the pharma giant says that the cost-cutting drive is due to a string of acquisitions rather than its various scuffles with regulators over the EpiPen. And “less than 10%” is a pretty broad metric at a place like Mylan, which has 35,000 employees around the globe.
Eli Lilly had a rough go with its investigational Alzheimer’s treatment solanezumab, which came with high hopes and heavy investments from the Indianapolis-based pharma. But the drug maker decided to drop the treatment after it failed the primary endpoint in a late-stage clinical trial.
That failure comes loaded with consequences for the company’s workers, hundreds of who will be laid off, according to the Indianapolis Business Journal. The cuts will mostly affect Lilly’s U.S. sales reps, especially since the company also plans to stop actively promoting a number of high profile treatments like the erectile dysfunction drug Cialis as it approaches patent expiration.
“In connection to the solanezumab outcome, as well as the company’s decision to stop sales force promotion of several products in expectation of upcoming patent expirations, we informed employees earlier this week that we would be reducing the size of our U.S. Bio-Medicines sales force in the first quarter of 2017 to better meet our future business needs,” a Lilly spokesperson told the Journal.
Endo Pharmaceuticals, headquartered in Dublin, Ireland and Malvern, Pennsylvania, manufactures specialty and generic medications. And it’s about to chop off 375 workers under its new CEO, Paul Campanelli, who’s trying to shift the company’s strategy away from its flagship pain drug franchise.
Endo has decided to pull back in the space after the backlash to opioid painkillers catalyzed by the ongoing addiction and overdose epidemic in the U.S. “The opioid market and Endo’s strategic priorities have evolved,” said Campanelli in a statement announcing that Endo would be ditching the Belbuca pain product that it had planned to snatch up from BioDelivery Sciences.
Britain’s AstraZeneca, which has been struggling under the pressure of patent expirations on best-selling therapies and setbacks in its clinical pipeline, will be slashing 700 jobs across the U.S. in a bid to return to growth.
The cuts don’t come as much of a surprise considering that AstraZeneca had announced plans to try and save $1.1 billion annually earlier this year, necessitating systemic reductions. And reduced sales of major products like Crestor in in the face of competition from generics hasn’t helped the situation.
“We have made the necessary but difficult decisions that are required to reflect our lower U.S. revenues in 2017. We will reduce U.S. commercial business expenses, which includes the elimination of about 700 positions (roughly 80 of those will come from existing vacancies) and a reduction in discretionary spend,” an AstraZeneca spokesperson told Philly.com.
The latest in on this week’s job cut train is also the biggest company on the list, French pharmaceutical giant Sanofi.
Sanofi has long been known for its flagship diabetes franchise, which includes the best-selling insulin Lantus. But that very marquee unit has been grappling with generic competition for several years now (which also helped lead to the ouster of its former CEO). And hotly anticipated new therapies like the next-gen cholesterol-buster Praluent has, so far, been slow to embark on the path to blockbuster sales status that many had projected.
In the face of those struggles, new chief Olivier Brandicourt has been moving the company into a massive re-organization that’s also involved substantial job cuts and a total shakeup of its executive roster, especially the diabetes and cardiovascular unit—the very unit that will now be significantly scaled back in the U.S., to the tune of a 20% staff reduction, the company announced during a meeting on Friday.
The original article was published at Fortune.com and was written by Sy Mukherjee. Find original article HERE.