AstraZeneca’s reasonably healthy set of financials for the fourth quarter have been overshadowed by the news that 8,000 jobs are to be shed by 2014, a sizeable chunk of which will come from R&D.
The Anglo-Swedish drugmaker’s five-year plan was disclosed at a press conference in London and comes after a two-year restructuring which saw the reduction of 12,600 positions. This next phase will lead to savings of a further $1.9 billion, though the company will be taking hefty charges as part of the changes.
The job cuts will affect 3,500 posts in R&D, though AstraZeneca maintains that the net reduction may be around 1,800 positions. When asked by PharmaTimes World News whether the changes represent a move to almost-withdrawal from the discovery process of R&D, chief executive David Brennan said that was not the case on an internal level. However he noted that much more external collaborations and outsourcing across the board will be pursued.
The company also refused to be drawn on the scale of the cuts in the UK. Anders Ekblom, head of development, told PharmaTimes World News that he had no comment to make on specific numbers, as negotiations with employees and trade unions are still taking place, although given that most of AstraZeneca’s R&D efforts centre around the USA, UK and Sweden it is fair to assume they are the regions where most of the cuts will take place.
He noted that the company is “further refining its focus on disease areas” and is establishing eight IMeds (Innovative Medicines Units), which will be overseen by a ‘portfolio investment board’ that will include Mr Brennan, Dr Ekblom and other top executives. The development chief added that the changes will help create a more efficient and flexible R&D model, creating an innovative yet entrepreneurial culture.
Mr Brennan said that AstraZeneca has made a “candid assessment” of the challenges it faces, especially as it faces up to some near-term patent expiries, and he stressed that the best performers in pharma will be those who improve their cost-management capabilities. He added that more partnerships will be signed but large mergers and acquisitions are not on the horizon for the company.
As for the financials, AstraZeneca posted a 4% rise in fourth-quarter sales (at constant exchange rates) to $8.95 billion, while operating profit was up 13% to $2.33 billion. Turnover from Crestor (rosuvastatin) increased 20% to $1.26 billion , while sales for Toprol XL/Seloken (metoprolol) shot up 53% to $324 million, due to the withdrawal of copycat products from the market in the USA.
Revenues for the antiulcerant blockbuster Nexium (esomeprazole) were down 7% to $1.28 billion, while the asthma combo Symbicort (budesonide and formoterol) increased 22% to $666 million. Sales of the antipsychotic Seroquel (quetiapine) rose 6% to $1.26 billion.
Turnover of the breast cancer drug Arimidex (anastrozole) were up 6% to $499 million, while generic competition to Casodex (bicalutamide) saw the drug fall 38% to $189 million. AstraZeneca’s swine flu vaccine LAIV brought in $237 million from US government orders.
