Drugmaker AstraZeneca To Cut 1,150 U.S. Employees
By Tom Murphy
INDIANAPOLIS (AP) -- AstraZeneca PLC will cut roughly 24 percent of its U.S. sales force in a push to curb costs as the drugmaker fends off growing generic challenges.
The British company said Wednesday that it will cut 1,150 employees, including sales representatives and managers. It employs 14,000 people in North America, with most of those working in the United States.
"These changes are driven by the need to effectively compete in a challenging environment," spokesman Tony Jewell said.
Wednesday's announced layoffs are in addition to 400 cuts in AstraZeneca's U.S. commercial business laid out in October.
They also are in addition to cuts that stem from a restructuring plan announced in January 2010. The maker of the cholesterol fighter Crestor and the antipsychotic Seroquel plans to cut 10,400 jobs worldwide through 2014 as part of that plan. It will cost AstraZeneca about $2 billion but generate annual savings of about $1.9 billion.
The restructuring announced last year was an extension of still another cost-cutting program launched in 2007, which had saved the company $1.6 billion annually by the end of 2009.
AstraZeneca employs about 61,000 people worldwide. At the end of 2006, AstraZeneca employed more than 66,000 people. As it cuts jobs, the company has also been hiring in emerging markets.
Based in London, it's the second-largest pharmaceutical company in the United Kingdom, behind GlaxoSmithKline Plc. Last year, AstraZeneca earned nearly $11 billion on $33.3 billion in revenue.
The drugmaker received a boost in July when its long-delayed blood thinner Brilinta won U.S. regulatory approval. Analysts estimate that Brilinta, which could reduce heart attacks and prevent deaths in patients with clogged arteries, may reach sales of $1 billion by 2015.
That will help balance the company's woes - growing competition from cheaper generic drugs. The breast cancer treatment Arimidex lost U.S. patent protection last year. Two generic versions of Lipitor, a Crestor rival, recently hit the U.S. market. Lipitor, made by Pfizer Inc., is the world's best-selling drug. It had nearly $11 billion in sales last year.
AstraZeneca also will lose U.S. patent protection for its top three drugs - Crestor, Seroquel and heartburn treatment Nexium - by 2016.
The company said Wednesday it will take a charge ranging between $50 million and $100 million in the fourth quarter related to the most recent cuts, which it will finalize by February.
U.S.-traded shares of AstraZeneca fell 15 cents to close at $45.69, while the Standard & Poor's 500 closed up less than 1 percent.
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