AstraZeneca (NYSE:AZN) is cutting more than 7,300 jobs across its global operations as part of a restructuring move the pharmaceutical giant announced in its fourth-quarter earnings for 2012.
A spokesman for the company confirmed the 7,300 in cuts spread over the next two years could impact some positions at its U.S. headquarters in Wilmington, Delaware.
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Last year, the company said it would cut 1,150 jobs from its sales division across the U.S., along with 400 commercial positions, primarily at its U.S. headquarters. It has cut more than 21,000 jobs since 2007.
The cuts are being made in the run-up to patent expirations on blockbuster drugs that generate sales in the billions. Its antipsychotic drug Seroquel’s U.S. patent ends next month and in Europe later this year.
David Brennen the CEO said:
“While the further expected losses of market exclusivity make for a challenging 2012 outlook, we remain committed to a long-term, focused, R&D-based strategy, and today we have announced further steps to drive productivity in all areas to improve returns on our investment in innovation.”
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Profits at the company fell 8.3 percent in the fourth quarter to $1.49 billion as revenue stayed relatively flat at $8.66 billion.
Quoting analyst David Malik of Cenkos Securities, The Wall Street Journal reported that the second-largest pharmaceutical company in the UK has been affected by a mixed drug pipeline combined with economic uncertainty across Europe in response to the debt crisis:
“The reasons for this lower guidance, which include a weak euro and austerity measures across Europe, have not been helped by the lackluster pipeline contribution that has seen multiple products either fail in phase 3 or be delayed or rejected by regulators.”
The drugmaker has suffered setbacks with Dapagliflozin, a drug it has collaborated with Bristol-Myers Squibb for the treatment of type 2 diabetes in its quest for approval by the U.S. Food and Drug Administration.
Some analysts believe the areas AstraZeneca have targeted — cancer and depression — have high failure rates and therein lies one reason why the company’s pipeline is not as strong.
The company’s research and development restructure includes a smaller external neuroscience division of 40 to 50 scientists and will seek to partner with other drug development companies to spread risk.
Martin Mackay, AstraZeneca president of research and development, said:
“We’ve made an active choice to stay in neuroscience though we will work very differently to share cost, risk and reward with partners in this especially challenging but important field of medical
research. The creation of a virtual neuroscience iMed will make us more agile scientifically
and financially — we will be able to collaborate flexibly with the best scientific expertise,
wherever it exists in the world.”
Other pharmaceutical companies have cut back their workforces as a result of consolidation in the industry and other factors.
