AstraZeneca yesterday unveiled plans to double the number of expected job losses to around 7,600 as it looks to ramp up its cost-cutting programme in a bid to save $900 million by 2010. The cost of the restructuring will be $1.6 billion, with $458 million charge taken in the first half of this year.
In February, the Anglo-Swedish drugmaker unveiled a three-year restructuring programme and said it would trim its staff by around 3,000 positions, but will now increase this to more than 10% of its global workforce, with those most likely to come under the kosh being European sales and marketing, information services, and business support, while there will also be a reshaping of R&D activities.
The news hung over its second quarter results, which excluding the acquisition of MedImmune and restructuring costs, saw an 11% boost in operating profits to $2.5 billion and a 13% rise in adjusted second-quarter earnings per share (at constant exchange rates). Sales rose 6% on CER terms to $7.3 billion as stalwarts Seroquel (quetiapine), Crestor (rosuvastatin), Nexium (esomeprazole) and others put in strong performances, with the combined sales of its top-five growing 12% to $3.8 billion.
Despite the costs associated with restructuring and the MedImmune acquisition, AZ also narrowed its underlying earnings predictions for the full year to between $3.90 and $4.05 from $3.80 to $4.05 previously, a fact that Chief Executive David Brennan pointed out on a conference call reflected the business’ strength.
But investors weren’t sure how to react and, after an earlier gain, fell back to close down more than 3% on the London Stock Exchange. They are also feeling jittery with the departure at the end of the month of Jon Symonds, AZ’s chief financial officer. Symonds, who joins investment bank Goldman Sachs, is well respected but, as yet, no replacement has been found. The company's financial controller, Paul Kenyon, is believed to be taking on the role in the interim.