Denmark’s Nycomed has announced plans to cut 10% of its workforce as it begins to integrate the operations of recently-acquired German drugmaker Altana Pharma.
Chief executive Hakan Bjorklund said that as a result of the patent expiry of the firm’s largest product, the gastrointestinal drug pantoprazole, “and current dynamics within the global pharmaceutical industry,” the combined group will need to move with the times and “ this will require profound change in all parts of our organisation. Regrettably this is not possible without a reduction of up to 1,250 jobs worldwide.”
Specifically, 200 positions will go at “ central functions” in Germany and Denmark and 585 will be lost in R&D, while worldwide sales organisations will be affected by 465 redundancies, the vast majority of them in the 14 countries (Austria, Belgium, the Czech Republic, France, Germany, Greece, Hungary, Italy, Netherlands, Poland, Romania, Spain, Switzerland and the UK) with overlapping operations. Germany will be hardest hit with the loss of 930 jobs, with the biggest impact taking place in Konstanz, the former headquarters of Altana Pharma, where 790 posts will go. Nycomed spokesman Christoffer Jensen told PharmaTimes World News that “several hundred” staff will still be employed at the Konstanz facility.
Mr Bjorklund said that the new entity’s goal “is to build a best-in-class, mid-sized healthcare company that is ready for the future and well-positioned to take advantage of future growth opportunities” and that means job losses. The latter is “an essential precondition to secure the remaining more than 11,000 jobs and the long-term success of the company.”
Nycomed noted that it intends to improve the efficiency of the group by reducing complexity and expenses and will increase outsourcing to achieve more flexible cost structures. As for R&D, the firm stated that it will improve the balance of its product sourcing between in-house projects and in-licensing from external sources, claiming that as the pharmaceutical industry is now be focusing less on blockbusters, it will be looking to create a niche for itself with partners. However, “the transition to such a new R&D organisation will require significant changes in its size, scope and composition,” Nycomed added.
The company gave no specific details as to how this transition will come about and Mr Jensen also declined to say how much the group is looking to save once the restructuring of its operations has taken place. Some measures would certainly seem to be necessary as pantoprazole’s patents are due to expire in 2009 in Europe and in 2010 in the USA. Last year, the drug made 47% of Nycomed's total sales and the group admitted that “will not be able to compensate for this conceivable gap in revenues immediately, because of delays in the clinical development of major pipeline products,” Altana Pharma’s corticosteroid Alvesco (ciclesonide) and Daxas (roflumilast) for asthma and chronic obstructive pulmonary disease.
Mr Bjorklund concluded by saying that “I am painfully aware that this process will be difficult for many people” but “the right measures have to be taken now, at a time where the group is strong enough to successfully manage this change.”