AstraZeneca plans 7,300 global job losses
FTSE 100 drugmaker facing losses from expired patents
By CFOWorld.co.uk | CFO UK | Published 10:00, 02 February 12
FTSE 100 drug company AstraZeneca is to cut a further 7,300 jobs worldwide, on top of the 9,000 job losses since 2010, it announced on Thursday.
The Anglo-Swedish company aims to save £1 billion annually by the end of 2014, at an upfront cost of around £1.3 billion. It is unclear where the jobs will be lost in its 61,000 worldwide headcount, which includes 8,000 in the UK.
The drugmaker is facing losses as many of its best-selling drugs, such as antipsychotic medicine Seroquel and heartburn treatment Nexium, lose their patents in the next few years.
Chief executive David Brennan said: "The further expected losses of market exclusivity make for a challenging 2012 outlook."
There has been speculation that the company will have to make a large acquisition to make up for the lack of big drugs in the pipeline. Following the poorly received purchase of MedImmune in 2007, the company has so far eschewed another large deal. But that strategy could be up for review, especially with the group casting around for an outsider to replace current chairman Louis Schweitzer.
Doubts about AstraZeneca's future have grown since a double blow to its new drug pipeline in December when it scrapped an ovarian cancer drug and took a big writedown on an experimental antidepressant.
Its existing cardiovascular business is also uncertain, with new drug Brilinta off to a slow start and cholesterol fighter Crestor facing more competition following the arrival of cheap generic copies of Pfizer's market-leading Lipitor.
AstraZeneca now expects recently launched products and the pipeline to contribute $2-4 billion to sales by 2014, down from $3-5 billion estimated a year ago.
Drug stocks have outperformed the broader market in recent months, with investors attracted by their healthy dividend yields, but growth is elusive for many of the big firms.
Pfizer, the world's biggest drugmaker, reported a sharp fall in quarterly earnings two days ago and trimmed its 2012 forecasts, while European rival Novartis also said it expected lower profitability this year.
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