Santa not the only person with the sack this Christmas
Of the three firms, Bristol-Myers Squibb (B-MS) will shed the most employees with plans to cut 800 jobs by the end of the month in a drive designed to save it $2.5bn by 2012.
A company spokesperson told in-Pharmatechnologist.com the 800 sackings, which include both vacant and filled positions at manufacturing operations around the world, are part of the 4,300 earmaked for elimination in December 2007.
In common with most drug majors, B-MS faces losing patent protection for some of its most important products - including Plavix, Abilify and Avapro - which will be exposed to generic competition by 2013.
On a smaller-scale, Jazz Pharmaceuticals is cutting 71 jobs, approximately 24% of its workforce. The company, which eliminated 33 positions in June and 67 in November, is looking to reduce spending and grow sales of key products like Xyrem and Luvox, according to CEO Samuel Saks.
Similarly, Swiss biopharmaceutical firm Arpida is eliminating 60 jobs, reducing its workforce to just 20 permanent employees. A company statement explained that the move will help reduce its monthly cash burn to CHF1m ($896,696) by April next year.
Arpida is taking the step after the US Food and Drug Administration’s (FDA) Anti-infectives Advisory Board issued a negative approval recommendation for its lead product candidate Iclaprim.
Company CEO Jurgen Raths said that: “Having to dismiss employees is very sad, yet unavoidable in order to buy time to reconsider and develop strategic options.” While the FDA is yet to issue its final decision on Iclaprim it is widely expected that the drug will not be cleared in the US, dramatically reducing its potential market.
Commenting ahead of the FDA board’s decision last month, Goldman Sachs was downbeat about Arpida prospects, suggesting that the Swiss firm will need to raise money early next year. Arpida’s latest drastic job cuts lend further support to Goldman’s opinion.
Tough at the Top too
Further economic woes were seen in the drug sector this week as global leader Pfizer failed to raise its quarterly shareholder dividend for the first time in 42 years.
Krensavage Asset Management’s Michael Krensavage told Forbes he was surprised Pfizer had not increased its divided given its $26bn cash balance.
He added that: "It's interesting that a company that on the surface has so much cash isn't returning more to shareholders," and suggest that the firm may be having trouble accessing the fund due to tax issues.
