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After announcing its quarterly earnings and a 24 percent increase in 2011 profits, AstraZeneca (AZ) today made public its decision to eliminate another 7,300 jobs. Earlier this week there was speculation that job cuts were likely but the exact numbers were not disclosed. 

The reasons given for the layoffs despite increased annual profits? Government spending cuts for healthcare and stiff generic competition for several of its blockbuster drugs including Seroquel XR (depression), Atacand (hypertension) Crestor (cholesterol-lowering) and Symbicort (asthma); all of which have lost or will be losing patent protection in the near future. According to a company press release generic competition cut revenues by $2.0 billion in 2011 whereas government price interventions cost the company another $1.0 billion. The announced job cuts are expected to save AZ $1.6 billion by 2014—great news for shareholders but not so much for the employees who are losing their jobs!

Most of the cuts will take place in R&D. To that end, the company will close its facility in Montreal and layoff staff at its Soedertaelje site in Sweden. Interestingly, the company plans on focusing more on neuroscience and intends to hire 40 to 50 scientists in its new Innovative Medicine unit which is partly based in Boston, MA and Cambridge in England.

While layoffs at AZ were expected, the size of the current layoff does not bode well for other pharmaceutical employees. It is becoming increasingly clear that big pharma companies are getting out of R&D and focusing their efforts on M&A and licensing deals to fill their thinning pipelines. Also, while shedding R&D and sales jobs in developed markets, big pharma companies are investing heavily in building facilities and hiring thousands of R&D and sales personnel in emerging markets. From my perspective, it appears that big pharma has consciously decided to abandon developed Western markets where sales growth is in the single digits in favor of emerging ones where double digit growth is expected for the next decade.

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Thing have been quiet in the pharma layoff space during 2012. I guess that is not so surprising since we are only one month into 2012. However, there was a post on yesterday’s Pharmalot blog which indicates pharma layoffs may resume in earnest over the next few weeks. 

According to the post, AstraZeneca (AZ) is poised to shed thousands of more jobs after the company announces it earnings later this week. As you may recall, AZ recently announced that it would lay off 400 employees at its US headquarters and eliminate another 1,150 jobs from its US sales force. Like other pharmaceutical companies, things have been tough for AZ as three of its blockbuster products Crestor (cholesterol lowering), Nexium (acid reflux) and Seroquel (antipsychotic) lose patent protection and face stiff generic competition.

The Pharmalot post also reported that:

“Between 2007 and 2009, AstraZeneca eliminated 12,600 positions, a move that saved $1.6 billion annually, although that figure rose to $2.4 billion by 2010. The cuts announced that year were designed to save $1.9 billion annually by 2014 It is not clear how much the drug maker hopes to save with still more cuts, but some $3 billion may be spent on a stock buyback to bolster shareholder confidence.”

It is important to note that the massive downsizing that has taken place in the pharma industry over the past decade has little to do with the recession and everything to do with the loss of blockbuster revenues due to generic encroachment. Put simply, most pharma companies grew too large too quickly and subsequently realized that could not sustain their vast infrastructures if the loss of blockbuster sales revenues could not be replaced by new products. To wit, if you look at the P&L statements of many pharmaceutical companies, most have $5 billon to $30 billion of readily-available cash reserves on hand to “play” with. Sadly, the downsizing that has taken place had little to do with the present and everything to do about the future profitability of big pharma companies.

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Chicago-based Abbott Laboratories today announced that it would lay off 700 employees from its medical devices and diagnostics division as part of an ongoing restructuring effort. 

Most of the layoffs will take place in the Chicago area and affect employees that manufacture the company’s cardiovascular stents and diagnostic tests. According to a company spokesperson approximately 500 persons who work in stent manufacturing and 200 who work in diagnostics will lose their jobs.

The restructuring of Abbott’s manufacturing operations began several years ago and about this time last year the company layed off about 1,900 employees in Lake County, Illinois.

In October, Abbott surprised investors and analysts with the announcement that it would spin off its branded drug business, including Humira (psoriasis and rheumatoid arthritis) it’s largest selling branded pharmaceutical product. Company executives argued that the split would allow stakeholders and investors to separately and more accurately value Abbott’s other less risky businesses which include nutritional (baby) formula, generic drugs and medical devices and diagnostics.

Despite signs of economic recovery, it appears that layoffs are still occurring at a pretty good clip at many pharma and biotech companies. It now appears that medical devices and diagnostic company employees, who were once immune to downsizing and reorganization, are now fair game.

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Cambridge, MA-based Alnylam Pharmaceuticals, one of the many companies founded on the promise of RNAi technology today announced that it will reduce its current workforce by 33 percent to focus its financial resources on its leading RNAi treatment for hemophilia. Alnylam currently employs 173 persons which means that about 59 employees will lose their jobs as the company reorganizes itself.

Alnylam CEO, John Maraganore, PhD hopes that the downsizing and reorganization of the company will result in a $20 million savings for fiscal year 2012. Despite the hype, RNAi is still not ready for prime time as commercializable products and will likely be little more than an R&D tool.

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Asia’s largest drug maker, Takeda, today announced that it will eliminate 2,800 jobs or about 9% of its workforce in the US and Europe. The job cuts, planned over the next four years, are intended to better integrate NycoMed, the Swiss company purchased by Takeda for $12 billion last September.

Most of the positions affected by the downsizing are in the US and Europe and will help the company save $1.7 billion over the next year or so.The plan includes the elimination of 2,100 jobs mainly in Europe and 700 in the U.S. across research, commercial, operations and administrative functions. Takeda currently has about 30,000 employees worldwide with operations in 42 countries.

The reason for the downsizing is slumping US sales of the company’s top selling drug Actos (diabetes) that will lose patent protection this August and face stiff generic competition. Like other pharmaceutical companies, Takeda is abandoning the US and European markets in favor emerging markets in China, India, Brazil and the Middle East.

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This past holiday season, as usual, was rife with massive layoffs and downsizing at various big pharma companies. Interestingly, in 2011, most biotechnology companies were able to weather the economic downturn and layoffs were not typical. Sadly, 2012 looks to be a more challenging year for many biotechnology company employees.

In the past week or so, several relatively high profile public biotechnology companies announced layoffs. First, on January 5, XOMA, the long- struggling California-based biotechnology company issued a press release indicating its intention to reorganize to focus it financial resources on its lead product gevokizumab and the company’s unique antibody discovery and development capabilities. The reorganization will result in elimination of 84 positions (34% of its workforce) with 50 jobs being lost immediately and the remainder by the end of the first quarter of this year. The layoffs will save the company $14 million. The same day, Winnipeg-based Cangene Corp, one of Canada’s oldest and largest biotechnology company announced that it would eliminate 120 jobs or 17% of its current workforce.  Finally, today, Human Genome Sciences (HGS) announced at the annual JP Morgan conference in San Francisco announced plans to eliminate 150 jobs across multiple departments.

The HGS announcement was somewhat surprising because the company recently received approval for a pioneering systemic lupus erythematous drug called Benlysta. Apparently, poor Benlysta sales have battered the company’s stock price which resulted in the announced layoffs. HGS reported Benlysta sales of a slightly more than $25 million in the fourth quarter which were must less than analysts had originally predicted.

Although these layoffs may be troubling to some, it is important to note that each of  the three companies have been in existence for 20 years or more and are transitioning from research organizations into companies that are finally commercializing their products. Like it or not, companies with commercial products are held to higher standards and receive much greater scrutiny than start ups and early stage companies. That said, while there may be additional layoffs at some older more established biotechnology companies, it may be a good time to start a company. Word on the street suggests that there is a lot of investment capital out there for new start ups!

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The German pharmaceutical company Boehringer Ingelheim (BI) today announced that it plans on investing 70 million Euros to expand its manufacturing facility in the Zhangijiang High-Tech Park in Shanghai China. The expansion will continue through 2013 and the number of employees will increase from 240 to 400 at the new facility

BI was one of the first pharmaceutical companies to enter China in 1994 and the planned expansion was proposed to solidify the company’s position in the emerging Chinese market. The expansion will be modular and based on lean manufacturing practices to provide world class manufacturing capability at the site.   The company already sells certain therapeutic products in China including respiratory, cardiovascular, and CNS. Expansion of the existing manufacturing facility is intended to allow BI to expand into other therapeutic areas that include diabetes, oncology and stroke prevention.

Late last week Merck announced plans to build a new R&D facility in Beijing. Other companies have also announced plans to increase their presence in the Chinese market. I think it may be the time for American student to begin to consider Mandarin as their foreign language in primary and second school education programs.

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The Pharmalot blog today reported that pharma and biotech downsizing, restructuring and outsourcing have resulted in 38 manufacturing facilities in 2011. While this may not sound like a lot given the ongoing tough economy, the post reports that 65 facilities were closed in 2010. According to some estimates, these closures have resulted in the loss of roughly 18,000 life sciences manufacturing jobs in the past two years. Sadly, pharmaceutical manufacturing, like almost all other manufacturing jobs in the US are being lost at an unprecedented rate. Further, many of these manufacturing jobs are being outsourced to multinational CMOs or to manufacturing facilities being built by pharma companies in emerging markets like Latin America, Eastern Europe and Asia.

Not surprisingly, most of the 2011 closures were in the Northeast (8) resulting in the loss of roughly 1,400 jobs. And, not surprisingly again, one of the hardest hit states was New Jersey; home to almost all of the major pharmaceutical companies in the world. The next region that was hit hard is the Mid-Atlantic (7) with notable closures in Maryland (Shire Pharmaceuticals) and North Carolina (DSM Pharmaceutical Products).

Interestingly, while plant closures are on the rise, there is new manufacturing facility construction that may help to offset the losses. However, unlike the past, many of the new facilities are being financed by academic institutions and not-for-profits rather than life sciences companies. According to the post, roughly 106 new North American (not only the US) are underway and represent an investment value of $4.3 billion. The new Shire facility being constructed in Lexington, MA and the International Vaccine Center (InterVac) in Saskatoon, Saskatchewan were cited as examples.

Despite the constructions of several new manufacturing facilities in North America, it is obvious that most major life sciences companies are looking South and East for future pharmaceutical and biomanufacturing capabilities. The bottom line is that labor and the cost of goods are cheaper in these markets and in contrast with the past, there are skilled workforces in place to manufacture life sciences products according to American, European and Japanese Current Good Manufacturing Practices. 

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It seems that big pharma always waits for early Fall to announce pending job cuts. Novartis, Europe’s second largest pharmaceutical company, announced two days ago that it would eliminate 2,000 jobs mainly in the US and Switzerland but add new employees to operations in emerging markets like India and China. Novartis is just another addition to a growing list of big pharma companies that are slashing jobs in the US and Europe and hiring new employees in lower cost markets.

The announce cuts represent a 1 percent reduction in Novartis’ global workforce. The cuts will be implemented over the next three years and are predicted to save the company in excess of $200 million annually. 

According to a company spokesperson, Novartis will eliminate 1,100 jobs in Switzerland, with the balance in the U.S., Jimenez said. Some research will be moved to the U.S. from Switzerland, and reductions will be made in technical research and development, data management, clinical trial monitoring, drug safety and regulatory affairs. Novartis will add 700 positions in China and India in data management and trial monitoring.

As part of the reorganization and job cuts the company will close an over-the-counter drug manufacturing plant in Nyon, Switzerland and chemical production facilities in Basel and Torre, Italy.

The current cuts come after Novartis announced last November that it would eliminate 1400 U.S. sales jobs and more recently in March that it would reduce operations in the UK.

Although life science pundits recently suggested that job cuts in the pharmaceutical industry are slowing and may have hit rock bottom, it appears that the carnage is still taking place and will likely continue well into the future as more resources and monies are invested in emerging markets.

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Over the past 10 years or so there has been an enormous amount of consolidation in the life science industry. While this activity has been very good for shareholders, it has had a devastating effort on pharmaceutical R&D says John  LaMattina PhD, a chemist, blogger, author and former President of Pfizer Global R&D.

In his article “The Impact of Merger on Pharmaceutical R&D," LaMattina asserts:

“Mergers and acquisitions of pharmaceutical companies over the past 15 years have had a major consequence on the internal research and development productivity of these organizations. Industry consolidation has eliminated a high degree of competition and resulted in the downsizing of internal research efforts. The execution of these mergers has caused a loss of momentum in the development pipelines of these companies along with loss of scientific talent.”

In addition, he believes that M&A and outsourcing of R&D operations has resulted in the loss of scientific talent required for innovation and development of novel new medicines. “Sadly, this loss of innovation comes at a time when we are trying to find treatments for challenging and difficult-to-treat diseases like Alzheimers and many cancers” says LaMattina.

While most life sciences executives believe that consolidation is good for business, LaMattina, along with John Lechleiter, the outspoken CEO of Eli Lilly& Co (who is also a PhD-trained chemist) believe that continued consolidation in the industry will have devastating consequences. “We are still very much opposed to a large-scale combination. We don’t think size is necessarily supportive of innovation.” says Lechleiter. 

LaMattina added “Downsizing R&D hinders the ability of companies to develop new drugs because they lack the scientific expertise required to make critical decision as a drug candidate makes it way through the pipeline.”

Unfortunately, most current pharmaceutical and life sciences executives don’t think like LaMattina. Since 2001, over 300,000 pharmaceutical employees, mostly R&D scientists and sales representatives have lost their jobs.

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Astra Zeneca today announced that it will eliminate 400 positions at the company’s Wilmington, DE headquarters. Most of the cuts will be in sales and marketing and the downsizing is intended “streamline portions of its commercial business to best serve patients in the US.”

According to a press release, about 70 of the estimated 400 job cuts will come from existing unfilled vacancies. Also, employees will have the option to choose to potentially leave the company with a possible package. All decisions will be finalized by early December.

Like many of its competitors, AstraZeneca is facing fierce competition from generic manufacturers and downward pricing pressures. The company currently employs 61,000 persons worldwide including 14,000 in North America.

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From 2001 to present, roughly 300,000 pharmaceutical employees have lost their jobs. That is a massive number; second only to the job losses in the automotive and financial services industries. The main reasons for the layoffs have been a lack of return on investment on R&D activities and impending patent cliffs in 2013 for as many as 15 blockbuster drugs. 

Ed Silverman who runs the Pharmalot blog speculated in a post yesterday that the number of pharma layoffs may be dwindling. His assertions are based on an analysis of the annual number of pharma layoffs provided by the outplacement firm of Challenger, Gray and Christmas. Ed’s wrote:

 “So far this year, pharma layoffs have totaled 19,076, and this includes the 13,000 job cuts planned by Merck, which is actually eyeing many foreign positions, therefore, swelling the latest tally. Last year, pharma eliminated 53,636 jobs, down from 61,109 in 2009, when annual layoffs peaked. In fact, the 2009 bloodletting was outsized compared with every other year - the next highest annual layoff tally occurred in 2008, when 43,014 industry cuts were announced. Between 2003 and 2007, the number of jobs that were eliminated ranged from about 15,000 to 31,000 annually, according to the firm.”

This led Ed to posit that the worst may be over and those pharma employees who still have jobs may be able to relax a bit. However, it is important to note (as Ed also points out) that many big companies are still purchasing or opening new  R&D and manufacturing facilities in emerging markets like India and China and more and more R&D jobs are being outsourced. Further, while many US pharma reps have lost their jobs hiring reps in emerging markets continues to explode. Interestingly jobs that are in demand and still available to Americans include those in regulatory affairs, compliance, IT, clinical operations and marketing. Unfortunately, these are very specialized jobs and many of those pharma employees who have been layed off lack the requisite skills to compete for those jobs!

While I think we may have seen the last of massive layoff in big pharma, smaller and less publicized layoffs will likely continue at many US life sciences companies. The downsizing trend taking place in America will likely continue until drug pipelines are populated with new candidates and life science executive realize that outsourcing R&D job is not a viable solution for their productivity problems.

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After a relatively quiet summer, big pharma companies are beginning to ramp up layoffs once again. Novartis recently announced that more job cuts were likely and last week I got wind of Merck’s impending reorganization and layoffs from a colleague whose partner works for the company. Today, Merck formally announced that it had sent e-mails to employees about the new round of layoffs. Last July, Merck said that it planned to cut 12 percent to 13 percent of its workforce of about 100,000 by 2015 as it adjusts to market conditions and its 2009 acquisition of Schering Plough.

The layoffs will be part of the company’s restructuring of “select HQ functions and field groups within the U.S. Market: Marketing & Customer Solutions; Managed Markets & Policy; Strategy & Commercial Model Innovation; and the Neuropsychiatric and Women's Healthcare specialty sales teams,"

While it is not clear how many workers will be layed off during the next round of downsizing, industry insiders are speculating that about 5,200 of the total cuts could be U.S. jobs, with from 3,000 to 4,000 in New Jersey and Pennsylvania. A Merck spokesman would not comment on the state-by-state plans. The cuts through October won't be the end of the process, though.

In August, the company offered buyout packages to some employees, but it is unlikely that buyouts and voluntary retirements alone would meet the numbers that Merck executive expect to make. Interestingly, Merck spokespersons said that the company will continue to add new employees but cut jobs elsewhere. I suspect that most of the cuts will come in R&D and sales as they have in the past.

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Despite the fact that no new jobs were added to the US economy in August, things were pretty quiet in the pharmaceutical layoff space. From what I was able to find, it appears that Alcon Laboratories will be moving about 100 jobs from Atlanta to Fort Worth Texas (I was recently in Fort Worth for the first time and I extend my sympathies to those Atlantans that may make the move). The consolidation is taking place because Novartis purchased Alcon in April and after acquisitions these sorts of things happen. Nestle, another Swiss company, had a majority ownership in Alcon. 

Interestingly, there appears to be some consolidation also taking place in the contract manufacturing space. Contract Pharma announced that it would close its Buffalo, NY manufacturing facility (purchased from Bristol Myers Squibb in 2005) and eliminate 128 jobs. Those employees who do not lose their jobs may have an opportunity to work in a nearby Ontario, Canada site. Likewise, UK-based United Drug, another CMO, will cut 150 jobs because of government-led regulatory decision to reduce health spending.

While none of these announcements were particularly noteworthy, Sanofi-Aventis’ announcement today that it will cut $2.9 billion in costs over the next few years was somewhat shocking but not unexpected. Most of the cuts will be in R&D and there will undoubtedly be massive downsizing and reorganization. 

According to a post on today’s Pharmalot blog “a presentation indicates that research and development costs are in the process of being cut by 12 percent from 2008 to about $1.1 billion, excluding Genzyme. And the total headcount over this same period is being reduced by about 22 percent, from roughly 13,000 positions to about 10,000 jobs by the end of this year, again excluding Genzyme.”

Today’s announcement of cut back is consistent with Sanofi’s business strategy over the past year or so which included plant closings and large sales rep layoffs Again, the Pharmalot blog reported “The upcoming round involves slashing about $700 million in expenses from Genzyme, the biotech that Sanofi purchased recently, as oncology units in the Boston area are combined.”

The cost cutting measures are in response to the impending loss of patent exclusivity for several of its blockbuster products most notably Plavix and unexpected attrition in the company’s late stage clinical development portfolio. This year sales of products facing patent expiry are expected to decline to $4.2 billion as compared with $10.6 billion in 2008. To cope with these difficulties, Sanofi has gone on a buying spree over the last couple of years spending $23 billion to acquire various companies with Genzyme being the crown jewel.

Meanwhile, Sanofi plans to file for approval of six new drugs this year and hopes that it can introduce 19 new drugs by 2015. I suspect that Sanofi’s aggressive M&A strategy may help the company reach that goal. That said, if I was a Sanofi or Genzyme employee, I would be dusting off the old resume right about now.

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Layoffs at big pharma tend to slow during the summer as most people are on vacation and nobody wants to fire folks when the kids are out of school. However, the failing economy has prompted several companies to abandon tradition and fire people during the summer anyway.

According to the Pharmalot Blog, previously announced layoffs at Merck have been accelerated and approximately 8,000 more employees will lose their jobs in early August. While the layoffs were not unexpected, those affected likely thought that they had more time before being shown the door.

In other news, Elan announced that it was laying off 104 employees at its King of Prussia, PA facility. The layoffs resulted from the sale of Élan’s manufacturing facility to Alkermes for $960 million. The acquisition gives Alkermes a chemical formulation and manufacturing business and a stake in two recently approved drugs; Ampyra for multiple sclerosis and Invega Sustenna a treatment for schizophrenia. The layoffs will occur next month and the facility will be closed in September.

Finally, a recent KPMG LLP survey of top executives of US drug makers indicates that M&A activity will continue to increase over the next several years as pharma companies attempt to offset rising generic competition and waning drug revenues. At present, roughly 70 percent of all medications sold in the US are generics. 

Eighty-three percent of the executives believe that their companies will be buyers or sellers in deals over the next two years. Further, just over half believe that it will take more than two years for the US economy to fully recover.

While M&A activity isn’t a bad thing for some companies, it is typically followed by reorganizations and massive job layoffs which are obviously not good for rank and file employees. Consequently, if I worked for a major pharma or biotechnology company, I would definitely make sure that my CV was up-to-date!

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The Pharmalot Blog today reported that a Wall Street Journal article indicated that Pfizer is planning to cut $1.0 billion from its operating budget by 2012. As many of you may recall (especially those who lost their jobs) the world’s largest pharmaceutical company cut 1,100 earlier this year at its research facilities in Groton CT. The new cuts are aimed at reducing Pfizer’s R&D expenses by up to $2.9 billion annually.

The $1.0 billion in cuts is primarily aimed at reducing administrative and management duplications at Pfizer’s headquarters in NYC and worldwide. Other expenses to be trimmed include those related to promotions, travel, entertainment, consultants, print materials and supplies and electronic equipment. While there is no doubt that these cuts will help to control costs, I suspect that substantially more money could be saved if pharma executive salaries and bonuses were also trimmed.

While it is unclear what the additional $1.0 billion in cuts will have on scientists, I suspect it won’t be good. In case you have not noticed by now, Pfizer like many of its competitors are getting out of the R&D business. This means that R&D jobs will continue to dwindle and scientists will continue to struggle to find jobs in a highly competitive job market.

Since Pfizer purchased rival Wyeth Pharmaceuticals in 2009, the company has shed over 20,000 jobs. The reason for the job cuts and massive cost cutting measures at Pfizer is the loss of patent protection in 2012 for its top selling cholesterol medication Lipitor ($10.7 billion in sales) and its ED drug Viagra ($1.9 billion in sales). Last year Pfizer lost patent protection the antidepressant Effexor (peak sales of $3.8 billion) and the Alzheimer’s drug Aricept ($417 million in sales). Also, when mergers take place there is much overlap and duplication of effort that takes several years to sort out.

Don’t be surprised if new Pfizer job cuts are announced late next fall! Now, would be a good time for Pfizer scientists to remove the dust from their CVs; if it is not already too late!

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Mathew Herper, who writes at the Forbes Blog, reported today that according to a report compiled by the outplacement firm Challenger, Gray and Christmas, since 2000 the pharmaceutical industry cut 297,650 jobs. According to Herper “that is about as many people as currently work at the three largest drug makers — Pfizer, Merck, and GlaxoSmithKline — combined.” As he aptly points out “Many of those who were laid off were probably hired back by other drug makers. Some folks have probably been laid off more than once. It’s also worth noting that big mergers are one reason for the cuts.”

Nevertheless, the number of lost jobs is staggering. Interestingly, while almost 300,000 jobs have been lost in the last decade, a majority of the cuts (234,814) have taken place over the past six years (see below).   It is not clear from the report whether or not these numbers include the numbers of jobs lost by the aggregate life sciences industry (including biotech and specialty pharma) or only by the pharmaceutical sector.    

   Source: Challenger, Gray & Christmas, Inc. © (via the Forbes Blog)

With mergers on the way and more jobs being outsourced to Asia and elsewhere, don’t be surprised if the total number of layoffs continues to grow.

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It seems like hostile takeover bids in the life sciences industry may be de rigueur (how can anyone forget the Sanofi-Aventis/Genzyme hostile takeover saga that dragged on for almost a year). Interestingly, there have been 219 acquisitions of U.S. pharmaceutical companies in the past 12 months, with an average disclosed price of $153.7 million and an average premium of 44 percent!

Late yesterday, Valeant Pharmaceuticals announced plans for a hostile takeover bid for Cephalon, a 24 year old Pennsylvania-based biopharmaceutical company with eight products on the US market and more than 100 products worldwide. The takeover bid became “hostile” after Cephalon’s management team rejected earlier proposals.

Cephalon’s main focus is on nervous system disorders, pain and cancers. It is one of the world’s top 10 and most profitable biopharmaceutical companies. The company had revenues of $2.81 billion last year from sales of its narcolepsy treatment Provigil ($1.2 billion) and its leukemia treatment Treanda ($393 million). Also, according to the Cephalon website, there are several oncology products (lung, melanoma and solid tumors) in its development pipeline. In 2010 Cephalon announced seven acquisitions many of which were intended to bolster its oncology expertise.

Valeant Pharmaceuticals International, long a struggling speciality pharma company, merged with Biovail Corporation late last year and re-emerged as a re-invented company with substantial financial resources at its disposal. Prior to the Biovail merger, Valeant had a long history of acquiring smaller companies to bolster its R&D capability and its flagging drug development pipeline. The new company specializes in neurology and dermatology and has a diverse product portfolio that consists of branded pharmaceuticals, branded generics and over-the-counter medicines. In 2009, its revenues were $1.65 billion and 2010 revenues (to be released) are likely to exceed $2.0 billion. 

According to Bloomberg News, Valeant has offered to buy Cephalon for $5.7 billion in cash. Under terms of the offer, Valeant would pay $73 a share in cash; a 24 percent premium on Cephalon’s Tuesday closing stock price or a 29 percent premium to company’s 30 day trading average. Not surprisingly Cephalon executives summarily rejected the offer as “too low.” Several financial analysts concur with Cephalon and contend that the $73 per share cash offer undervalues the company’s true worth. Valeant and Cephalon are main competitors in the oncology and neurology markets.

Unlike the Sanofi/Genzyme bid, where it was clear at the outset to most observers that Sanofi would ultimately prevail, it isn’t clear whether or not Valeant will be successful in its attempt for Cephalon. While Cephalon has had its share of trouble with FDA over the past few years (for a variety of infractions including off-label marketing of Provigil), the company is in much better shape than Genzyme and the current management team has more resources at its disposable to ward off Valeant’s hostile takeover bid.

The downside of a Valeant-Cephalon merger would be job loss for many current Cephalon employees. This is because Valeant’s bid for Cephalon appears to be a “pipeline grab” rather than an R&D play. Typically, these types of acquisitions result in reorganization and downsizing of personnel because of duplication of effort. Only time will tell if Valeant will prevail.

Stay tuned for more late breaking news!

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Swiss pharmaceutical giant Novartis late yesterday announced that it would cut 550 jobs at it Horsham site West Sussex, England. At present, there are 950 workers at the Horsham site. The job cuts, 330 dedicated to respiratory research, will be made over the next two years.

This is more bad news for the UK pharma R&D workforce. In February, Pfizer said it would shut its Sandwich in Kent facility which employs 2,400 people. More job cuts are likely to take place in the US, UK and Europe as the pharmaceutical industry continues to scale back investment in R&D. 

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The French drug maker Sanofi-Aventis continues to reorganize and slash jobs in anticipation of its acquisition of Genzyme. Today the company disclosed that it would shed another 700 jobs from its European operations. The job cuts come amid the company’s reorganization of its units in Austria, Germany, Switzerland, Portugal Spain, Holland, the Czech Republic and the United Kingdom (basically the entire EU).  The goal is to consolidate and reorganize the 30 European subsidiaries into only 10.

In other news, the Japanese drug maker Eisai announced that it plans on cutting 600 jobs or 20 percent of its US workforce. This announcement comes only one week after the company disclosed that it would trim 900 jobs in the next five years from European and Japanese operations. Impending generic competition for Eisai blockbuster treatment for Alzheimer’s disease, Aricept, is largely responsible for the layoffs. Like most other big pharmaceutical companies there aren’t enough drugs in development pipelines to offset the loss of revenue from generic encroachment on blockbuster brands.

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Good Luck and Good Job Hunting!!!!!!!!!!

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The Japanese drug maker Eisai, Co announced that it will cut at least 900 jobs over the next five years to improve operating margins to offset the impending lost of patent protection for Aricept its blockbuster Alzheimer’s  disease treatment. The company did not specify where the cuts would take place.

In other news, based Eli Lilly & Co announced plans to outsource its R&D bioanalytical functions to Advion Biosciences a contract research organization that is building new laboratories Lilly’s home town of Indianapolis, Indiana. Ithaca NY-based Advion is building a 22,000 sq ft facility that will focus on ADME and toxicology experiments that are required for new molecules to enter human clinical testing.

Advion offers a range of Good Laboratory Practice-compliant and discovery bioanalytical services, including liquid chromatography-tandem mass spectrometry (LC/MS/MS) for determining small-molecule drugs, macromolecule therapies and biomarkers; immunoassay services; ADME (absorption, distribution, metabolism, and excretion) screening; cytochrome P450 inhibition and induction study support; metabolism profiling; metabolite identification; sample management; and sample storage.

According to a press release:

 “Lilly will transition its own drug discovery bioanalytical capabilities to Advion and will offer employees affected by the move the opportunity to join Advion. The new laboratory is expected to be fully operational by the end of May 2011.”

This is another example of big pharmaceutical companies exiting the R&D space. Because of the rampant downsizing and outsourcing of R&D functions to CROs, now could be one of the better times in years to start a biotech company. Big pharma is relying on starts up companies and academic laboratories to be the major source of new molecules that they develop. That said, the age of big “in-house” drug discovery operations at big pharmaceutical companies is drawing to an end. 

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Good Luck and Good Job Hunting!!!!!!!!!!!!!!!!

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Little is published in the blogosphere about the life sciences industry in Canada. Because of this, many people think that Canadian scientists and other bioprofessionals may have fared better than their US counterparts. However, like the US, thousands of scientists and others have lost jobs throughout Canada during the almost three year global recession.

While the number of layed off employees is no where near the almost 200,000 American pharma employees who have lost their jobs over the past four years, over 3,600 Canadian pharmaceuticals employees lost jobs in the second half of 2010. Most of the jobs were lost in pharmaceutical manufacturing. Like the US, these jobs were mainly lost as a result of outsourcing and corporate downsizing because of escalating financial pressures. Despite this, government officials expect the Canadian life sciences industry to recover by 2015.

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Good Luck and Good Job Hunting (Eh)

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Many industry insiders and financial analysts were pleased when former Pfizer CEO Jeffrey Kindler abruptly departed the company last December. Most felt that the company had grown too large after three mega-mergers and acquisitions (Warner Lambert, Pharmacia and most recently Wyeth) in the past decade or so. Pfizer bought Wyeth in late 2009 for $67 billion with the hope that it bolster the company’s drug development pipeline and replace vanishing Lipitor revenue (the move has not paid off which may explain Kindler unexpected departure).

Further, Pfizer’s best selling (and world leading) cholesterol-lowering drug Lipitor is due to lose patent protection in 2012. Lipitor had $10.7 billion in sales last year. This, along with the loss of patent protection for Viagra and a few other Pfizer prescription drugs, presumably left new CEO Ian Read, little choice but to slash R&D spending by close to $2 billion. Consequently, the company today announced it would close its research facility in Sandwich, England (which developed Viagra) and eliminate most of its 2,400 employees. An additional 1,000 employees at its research center in Groton, CT will either be offered transfers to its Cambridge, MA facility or layed off.

The elimination of 3500 Pfizer R&D employees begs the question “who will do the research to discover new drugs?” Not surprisingly, Pfizer’s answer is to outsource the work to Contract Research Organizations like Covance, Charles Rivers Laboratories and Parexel International Corp. Interestingly, much of this work is conducted by scientists who work outside of the US. And, if this down sizing trend continues how will the US ever get its unemployment rate below 10 percent?

Pfizer, like most other major US pharmaceutical companies, is no stranger to massive downsizing. The company alone has layed off over 19,000 employees over the past three years. And, unlike contractions in the life sciences industry in the past, I highly doubt that many of these R&D positions will be reinstated in the future. With this in mind, I highly recommend that those of you who were considering industrial R&D careers have a plan B or possibly a plan C to fall back on.

Until next time...

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Layoffs at big pharma companies have become commonplace but downsizing at generic manufacturers? Aren’t generic drugs sales exploding through the roof? And, aren’t all major pharmaceutical companies facing patent cliffs responsible for the massive downsizing that has taken place over the past four years? Teva executives apparently didn’t get that memo and announced today that the company will lay off 200 employees at its Irvine, CA manufacturing facility. Of the 200, 195 will lose their jobs by February 6, 2011.

This is the second round of layoffs at the manufacturing facility that Teva acquired after purchasing biosimilar manufacturer Sicor Inc., in 2003 for $3.4 billion. Last July, 70 jobs were eliminated at the plant which previously manufactured Propofol, the powerful sedative implicated in Michael Jackson’s death. Teva has since discontinued production of the drug because of the drug because it was hard to manufacture and that the company got little or no profit from it.

The company had to halted production and recalled some Propofol in 2009 after 41 patients were sickened with flu-like symptoms. The problem resulted from elevated endotoxin levels found in some vials of the sedative. Several lawsuits also were filed over the drug.

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In press release today, Merck & Co disclosed that it reduced the size of its global sales force by 12 percent in 2010. Ken Frazier, Merck’s newly appointed CEO, pointed out that cuts in sales force sizes in developed markets like the US and Europe reached almost 30 percent. Yet, despite these cuts, Merck reported that it was able to boost sales in its vaccine and pharmaceutical business units.

Merck, like most other big pharmaceutical companies, have drastically reduced the sizes of their sales forces in recent years. The cuts have been attributed to higher than expected product attrition rates, product recalls and changes in physician preferences. It appears that many physicians grew tired of repeated visits by multiple reps after they were no longer allowed to give gifts or buy lunches for physician office staff. Further, many industry analysts contend that the advent of web-based marketing, social media and medical reimbursement overhaul (doctors no longer have time for reps) have largely rendered most pharmaceutical sales reps obsolete!

Other factors contributing to the recent demise of pharma reps are thin drug development pipelines, tougher regulatory standards for drug approval and impending patent cliffs (generic encroachment) for many blockbuster small molecule drugs. Put simply, fewer drugs require fewer people to sell them.

I think the death knell for pharma reps may be a bit premature. Many physicians find that well trained and informed sales rep can be a great resource and helpful to their practices.  Nevertheless, looking on the bright side, there is a growing need for sales reps that possess the background and training to sell biotechnology products! That said, unemployed pharma reps may want to consider going back to school to get some biotechnology training. This training is frequently available at local community colleges and four year colleges and universities and online.

Until next time...

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Aptuit, a drug discovery and development company announced that it will be cutting 340 jobs in Scotland over the next year. The company cited the worldwide economic downturn as the culprit. Likewise, the Austrian vaccine maker Intercell announced that it would be laying off an unspecified number of employees and dramatically cutting R&D expenses (by 40%) after it killed development of its enterotoxigenic Escherichia coli vaccine patch. The company pulled the plug on the vaccine after it failed to reduce the incidence of diarrhea in a randomized and placebo-controlled Phase III study involving 2036 participants.

On the bright side, PPD, a global contract research organization, announced that it plans to invest $28 million to expand its Lab Services Division in Henrico County, Virginia and add 190 new jobs over the next three years. 

Until next time...

Good Luck and Good Job Hunting (try Virginia)!!!!!!

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Despite public assertions made by Novartis a mere eight days ago that it would not be eliminating thousands of jobs, the company today announced that it was eliminating 1,400 sales reps. Roughly 1,150 jobs will be cut from its primary care division—which is being consolidated into three units from four in the US—and another 250 from psychiatric and neuroscience. No jobs will be eliminated from Novartis’ headquarters in Hanover, NJ. While the job cuts announced today were not in the thousands (almost) it isn’t clear whether or not more are to come.

According to a post on today’s Pharmalot blog:

"Novartis had attempted to dampen speculation that a huge bloodletting was imminent after Roche disclosed plans to axe 4,800 jobs worldwide (back story) and, in fact, Joe Jiminez, the CEO, had written on his internal blog that news reports about big layoffs were inaccurate. Technically, the Novartis reduction is not in the thousands, but the number is still large and, essentially, confirms concerns that have been expressed over the past month at CafePharma, the online forum where reps dish the dirt (look here)."

Don’t you just love the holidays?

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The fiscal year at most life sciences companies is drawing to a close, new budgets are being crafted and the holiday season is almost upon us. In years past, this time of year typically meant that it was bonus time for most pharma workers. Sadly, over the past three years bonus time has been replaced by layoff time. And, unfortunately the upcoming holiday season may not be joyous for many Pfizer and Roche employees.

Yesterday, Pfizer indicated that it may lay off up to 11,700 more employees than the 19,500 it had announced in connection with the buyout last year of Wyeth Pharmaceuticals. While Pfizer confirmed that it would be reducing its worldwide work force by more than the originally expected 19,500 the exact number remains a mystery. However, a quarterly report filed Friday with the U.S. Securities and Exchange Commission stated that Pfizer has estimated termination costs for 46,600 employees, while only 33,400 workers had actually been laid off as of Oct. 3. This appears to suggest that the company plans to reduce its work force by 11,700 more than originally announced, given that Pfizer is only 1,500 positions away from fulfilling its job-elimination pledge related to the Wyeth merger.

The additional job cuts—if they are realized—would amount to about 10 percent of Pfizer’s worldwide work force. If a reduction of that magnitude were applied to Pfizer drug-research sites in Groton and New London, which currently employ nearly 5,000 workers, about 500 jobs would be lost. The company in January 2009 announced that cuts would total 15 percent of the combined Pfizer and Wyeth work force. At the time, the combined work force numbered about 130,000; the latest official figure places that number at 111,500.

In other news, Roche today announced plans to cut 4,800 jobs, or 6 percent of its worldwide workforce of 82,000. Today’s announcement confirms the news leak three months ago (reported by the Pharmalot Blog) which suggested that job cuts would be likely during the fall.

According to today’s press release, technical operations activities will be reorganized in California, Mannheim, Germany and various other sites, resulting in the elimination of 750 jobs. The company also intends to sell sites in Florence, South Carolina and Boulder, Colorado; shedding an additional 600 jobs. About 1,200 jobs will be cut in the North American commercial operations, mainly in Roche’s primary-care business, while 700 positions will be lost in commercial operations in Europe.

R&D will also be affected. The company will discontinue activities in research and early development in RNA interference in Kulmbach, Germany, Nutley, New Jersey, and Madison, Wisconsin. Also, there are plans to reorganize other operations at these sites which will eliminate another 600 jobs.

Until next time...

Good Luck and Good Job Hunting (are there any left?)!!!!

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I am certain that many of you may have noticed that the size of the life sciences industry is shrinking at an unprecedented rate. Big pharma companies flush with cash, near- empty pipelines and impending patent cliffs have embarked on a buying spree that is likely to continue for next years (or at least until the economy shows clear signs of resuscitation). Pfizer’s impending acquisition of King Pharmaceuticals is just another transaction in a long list of M&A deals that have occurred over the past three years.                             

According to an article in today’s NY Times, roughly $42.2 billion worth of pharma deals have been transacted so far this year. That number is close to the $45.8 billion in M&A transactions announced by the same time last year (excluding Pfizer’s acquisition of Wyeth and Merck’s purchase of Schering Plough). Unfortunately, these mega-merger deals almost always result in massive layoffs in the industry.

While blockbuster mergers may not be good for pharmaceutical employees, the behind the scenes players—investment bankers, brokers, advisers and consultants—make out extremely well. For example, according to an article in Pharmaceutical Technology Europe, over a three month period in 2009 pharmaceutical company merger and acquisition activities generated $500 million in advisory fees for investment bankers. Clearly, mergers and acquisitions are in the best interest of company executives and the investment bankers not pharmaceutical employees.

There is no question that the recession and the down economy are driving much of the M&A activity in the life sciences sector. And, industry consolation is to be expected during challenging economic times. However, while M&A may be in the best interest of pharma company shareholders in the short term, I don’t think it will help to insure American competitiveness and innovation in the life sciences over the long term. 

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Pfizer today announced that it will purchase Bristol, TN-based King Pharmaceuticals for $3.6 billion in cash or $14.25 per share: an approximately 40% premium over King’s closing share price yesterday.

King is a diversified specialty pharmaceutical drug delivery and clinical development company with expertise in delivery of easy to abuse or misuse pain medicines, self injecting delivery devices and animal health

The acquisition will help Pfizer push forward with its new emphasis on biopharmaceuticals and rare disease drugs; both currently require parenteral administration to patients.

The King acquisition is consistent with Pfizer’s M&A strategy to enter new therapeutic areas and markets. In the last 10 years or so Pfizer has acquired Warner Lambert, Pharmacia, Wyeth and several smaller companies including Sugen, Copely Pharmaceuticals, Encysive Pharmaceuticals, Serenex and others.

Whether or not Pfizer can successfully integrate King’s expertise and business units into its existing monolithic corporate structure remains to be see. Pfizer is still trying to right itself after it acquired Wyeth Pharmaceuticals for $65 billion early last year.

Big pharma companies—flush with cash—have been on a buying spree of late. Unfortunately, the availability of this cash is directly related to the massive downsizing and layoffs that have taken place in the industry over the past few years. That said, if I were a King employee, I would be dusting off my resume!

Until next time

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Late last Friday, Sanofi-Aventis announced that it was restructuring it US pharmaceutical business to meet the demands of a more challenging American healthcare market. The company said that it will streamline U.S. Pharmaceutical Operations and reduce its workforce by an estimated 25 percent. This translates into eliminating approximately 1,700 positions. Decisions about the breadth and scope of the cuts will be finalized by mid-December.

Of the 13,000 US employees, 6,900 work in the Pharmaceutical Operations division. Other Sanofi-Aventis affiliates in the United States include its R&D group, Sanofi Pasteur Vaccines, BiPar and Chattem: its consumer healthcare business.

According to Gregory Irace, President of Sanofi-Aventis and CEO of Sanofi-Aventis US/.Canada Pharmaceutical Operations,

“Given the serious challenges facing our organization and the healthcare industry, it is important to act decisively now so that our organization has greater stability moving forward and that our resources are allocated to our strategic growth priorities. These changes will foster a renewed focus on the strong growth and pipeline opportunities that will drive our vision of being a diversified healthcare leader.” Sanofi faces a serious “patent cliff” in the very near future; mainly because its top selling anti-clotting drug Plavix is slated to lose patent protection in 2011. Also, the company lacks expertise in biotechnology: the discipline that most big pharma companies is going to drive future growth in the industry."

The lack of biotechnology prowess is largely responsible for Sanofi’s attempt to purchase Genzyme, one of the largest and profitable biotechnology companies in the world.

Last week, Sanofi confirmed that its bid for Genzyme had become hostile because its management team and board of directors failed to seriously consider a bid tendered at $69 per share or $18.5 billion. Genzyme’s management team and board of directors immediately rejected the hostile bid (as it did in the past when the offer was “friendly”). The hostile bid allows Sanofi-Aventis to bypass Genzyme’s Board and appeal directly to its shareholders to consider the offer.

Restructuring of its US pharmaceutical operations, may be a sign that Sanofi-Aventis is attempting to cut costs to finance the all cash deal.

I suspect that Sanofi-Aventis will prevail in its bid for Genzyme; but it will have to sweeten the offer to appease activist investor Carl Icahn who is likely seeking an offer in excess of $75 per share.

If I were a betting man, I would put my money on Icahn—a brilliant financial strategist who frequently gets what he wants

Stay tuned for more late-breaking Sanofi-Aventis/Genzyme news!

Until next time...

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While a report released today indicated that the pharmaceutical market is expected to grow to about $800 billion by 2011—a 5 to 7 percent increase—pharmaceutical companies shed another 6,069 jobs in September according to the outsourcing firm Challenger, Gray & Christmas. This is compared to only 200 pharmaceutical employees who were given pink slips in August. Despite a lull this summer, it appears that pharma companies are ramping up again to layoff large numbers of employees by year’s end.

Previously, industry analysts were predicting that job losses in the pharmaceutical sector would be less than last year when 58,583 employees were shown the door. However, at the current pace—43,334 jobs lost so far—the total number of pharma jobs lost in 2010 may match or surpass the losses in 2009. This is because pharma budgets for the upcoming fiscal year are prepared in the fall and the real bottom lines are not known until the holiday season is upon us. Consequently, pharma has a nasty habit of announcing layoffs during the holiday season (nice huh?)

To date, Abbott Laboratories, Bristol-Myers Squibb, Endo Pharmaceuticals, Lundbeck, Lonza, and Johnson & Johnson have all announced plans to reorganize and downsize. It is anyone’s guess which companies may follow suit.

Unfortunately, it is tough to be in the life sciences business these days; unless of course you live in China, India, Eastern Europe and Latin America! Alternatively, it may not be a bad idea to relocate!

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Several months ago, I posted an article that suggested that layoffs in the pharmaceutical industry were beginning to slow. Apparently executives at Bristol Myers Squibb (BMS) didn’t read my blog post (I believe that they have in the past) and today announced that the company will eliminate 840 jobs or 3 per cent of its 28,000 member workforce.

The company says the jobs will be eliminated over the next six months, and the cuts could be spread across all its businesses and geographic locations. A BMS spokesperson indicated that company executives are still reviewing the entire organization to determine which jobs will be eliminated. The new round of layoffs is intended to further streamline the company. Interestingly, BMS purchased Seattle-based Zymogenetics for $885 million two weeks ago.

These cuts coupled with small biotechnology company acquisitions and a recent stock buyback initiative suggests that the company may be positioning itself for sale or merger. BMS’ top selling drug Plavix which represents almost 40 percent of the company’s revenue stream will lose patent protection in 2011.

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Despite assertions by its CEO that there isn’t enough scientific talent in the US, Eli Lilly announced that it will lay off a couple of thousand employees within the next 90 days. Most of the cuts will take place in Indianapolis at four different sites where the company currently employees about 13,000 workers. According to an article in today’s Indianapolis Star

“The struggling Indianapolis company, which has been cutting thousands of jobs in recent months, told the state on Monday that its downsizing is not temporary, but for the long haul.

The reductions in force at the Indianapolis sites of employment are expected to be permanent," wrote Kay Jackson, Lilly's senior director of human resources, in a letter to the Indiana Department of Workforce Development. She added that the cuts, when added up, are not expected to be more than 33 percent of the head count at any one site, or more than 500 workers at any site."

Like most of its rival big pharma companies, Lilly has cut the number of full-time equivalent workers by about 2,100 worldwide since last September. That's when it announced it would cut a total of 5,500 workers worldwide by 2011 to save $1 billion in annual costs. The reason for the cuts; an expected steep falloff in revenues over the next few years when the patents on Lilly's blockbuster drugs begin to expire and face low-priced generic competition  

John C. Lechleiter, Ph.D, Lilly’s CEO, contends that the lack of innovation and new product development at most American pharmaceutical companies can be explained by a dearth of qualified and adequately trained American scientists. Maybe this is why most pharma R&D job are currently being outsourced to China, India, Brazil and Eastern Europe? Alternatively, it may be cheaper to employ US-trained foreign nationals in these places rather than high priced American scientists who perform similar jobs in the US.  

Until next time...

Good Luck and Good Job Hunting (forget Indiana-not there is anything wrong with it)

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There are signs that the economy is improving and that unemployment levels have dropped from a high of 10.1 % to current levels which are hovering around 9.5 %. While this is good news, job cuts continue at many pharmaceutical and biotechnology companies as drug candidates fail in clinical trials and technological advances make certain employees dispensable.

Yesterday, Johnson and Johnson announced that it would layoff 300 of 400 employees who work at the Fort Washington, PA plant that was responsible for the recent Tylenol brouhaha and recall. According to a post on the Pharmalot blog:

”The employees are being let go because it is not clear when the plant will operate again. A J&J spokeswoman says the “best estimate” is the middle of 2011. It isn’t clear at this point whether or not any McNeil executives who oversaw operations at the troubled facility will also be shown the door."

In other news, Adolor, a Pennsylvania-based specialty drug maker, announced yesterday that it was laying off 30 workers or 30 per cent of its workforce to preserve capital and advance its opioid bowel dysfunction clinical development program through proof-of-concept studies in 2011. Also on Friday, the company stated in a press release that two new drug candidates it was developing with Pfizer to treat pain caused by osteoarthritis did not work better than a placebo in a Phase II clinical trial involving 400 patients. The company has one drug on the market, Entereg, a treatment that helps restore bowel function in adults who have undergone bowel re-section surgery. Earlier in the week, GlaxoSmithKline, which co-developed Entereg, scaled back its relationship with Adolor.

Finally, Eli Lilly & Co told its employees that it plans to cut 340 information technology jobs in 2010. Most of the cuts will take place in Indiana (Lilly’s corporate headquarters is in Indianapolis). The company has 1,350 information technology employees nationally. Earlier this year, Lilly has said it will eliminate 5,500 jobs by the end of 2011 to save $1 billion.

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According to a post on Pharmalot, a great blog run by the intrepid Ed Silverman, Sanofi-Aventis is laying off 400 employees; most of the them sales representative. The layoffs are in response to impending generic competition for several of the company’s older medications— the Ambien CR sleeping pill and Aplenzin antidepressant and declining sales of Actonel an osteoporosis medication. And, based on statements made by a company executive who manages the company’s therapeutic portfolio this may only be the tip of the iceberg as revenues from brand drugs continue to decline over the next few years.

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Pfizer today announced that it would lay off another 123 workers at its Pearl River, NY manufacturing and R&D site.

The workers in the facility's research and development division will lose their jobs by early July according to a company spokesperson. He added "There may be some additional positions eliminated over the course of 2010, but this is the last major wave that will be announced.”

This brings to 601 the total number of layoffs at the site. The cuts are part of a global restructuring Pfizer announced in November, weeks after acquiring Wyeth Pharmaceuticals. The company has yet to decide the fate of the plant's manufacturing arm. If it is shuttered, that could lead to more layoffs

In other news, lesser known KV Pharma said it would shed 289 workers or 42 percent of its workforce. KV already had reduced its staff from 1,700 in 2008 to about 680 as of Feb. 28. The company recently shut down its generics subsidiary Ethex Corp. after the company pleaded guilty to criminal charges for not disclosing problems with two of its drugs and agreed to pay $27.6 million in fines and restitution.

While the US government and financial analysts claim that the economy is show signs of improvement, the layoffs at pharma and biotech companies continue. Only time will tell if we have truly turned a corner during this economic downturn.

Hat tip to the Pharmalot blog!

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Roche disclosed in a regulatory filing that it will plans to eliminate 500 positions in New Jersey by the end of this month, related to last year's acquisition of Genentech Inc., and plans to cut another 100 jobs in the state by June. While the cuts were expected after Roche acquired Genentech last year and announced it would move its US headquarters from Nutley, NJ to South San Francisco, it wasn’t clear how extensive the job loses would be. The company is closing down all manufacturing operations at the aging Nutley site.

This is more bad news for the State of New Jersey which has borne the brunt of the pharma downsizing trend that began in earnest about 4 years ago. As many of you may know, New Jersey has the highest concentration of pharmaceutical employees in the US. The loss of pharmaceutical jobs coupled with an enormous budget deficit suggests that it will be many years before New Jersey is able to recover from the economic downturn.

Roche, which had 2009 revenue of about $45.9 billion, employs more than 80,000 people worldwide.

Until next time…

Good Luck and Good Job Hunting (forget New Jersey)

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For the past year or so, I have been focusing on the downsizing and layoffs taking place at big pharmaceutical companies. The unprecedented size and scope of these massive layoffs have overshadowed the downsizing and job loss taking place at small to mid-size public and private biopharmaceutical companies. In contrast with most fully-integrated vertical pharmaceutical companies that are flush with cash, most biotech companies—even the likes of Amgen, Genentech, Gilead and others—don’t have the cash reserves to maintain operations in a down economy or when a drug candidate fails in clinical development. This coupled with the lack of venture and private equity capital has been causing biopharmaceutical employees to lose sleep in recent months.

Over the past few days, two CA-based biopharmaceutical companies announced major layoffs. The first, San Jose-based Xenoport, announced that it plans on cutting its 222 person workforce by 50% over the next few months. According to company executives, the layoffs are necessary because the US Food and Drug Administration (FDA) failed to grant approval to its lead drug candidate Horizant, a treatment for restless leg syndrome. This will allow the company to annually save about $15.6 million and focus its development efforts on other products that are in Phase II clinical development. 

San Francisco-based Exelixis today announced that it would cut about 40% of its workforce or 270 employees to focus on development of its late stage drug candidates. The biotechnology company, which expects to reduce its 2011 cash expenditures by about $90 million, said it would focus on the development of its anti-cancer drugs XL184, XL147 and XL765. These layoffs are occurring less than a year after the company announced a potential $1.0 billion deal with Sanofi-Aventis in which Sanofi invested $140 million upfront to license two of its oncology drug candidates.

Things are also not going well for the numerous small to midsize biotechnology companies in the Seattle area. According to Xconomy, a company that tracks layoffs in and around Seattle, the region has shed 4,500 biopharmaceutical industry jobs since 2008.

Finally, BNET compiled a top biotech layoff list for 2009. The notables that made the list are shown below.

1. Sepracor (530). The layoffs represented 20 percent of Sepracor’s workforce, and another 410 contract sales reps also got the axe. The restructuring apparently worked and Dainippon Sumitomo Pharma the company later in 2009.
2. Allergan (460). This represented a five percent reduction in the company’s workforce.
3. Genmab (300).  Arzerra (ofatumumab) the company’s leukemia drug won FDA approval a week before layoffs were announced (go figure). But Genmab wanted to cut manufacturing and late-stage clinical work to refocus on antibody discovery.
4. Oscient Pharmaceuticals (280). Oscient cut about 100 jobs in February, 2009 to entice acquisition partners. When that didn’t work, the firm cut another 180 in June as it dumped the sales force for its two marketed products. Cornerstone Therapeutics later picked up Oscient’s antibiotic Factive during bankruptcy.
5. Amylin Pharmaceuticals (200). After cutting 340 jobs at the end of 2008 amid declining diabetes drug sales and regulatory delays, Amylin eliminated 200 sales reps in mid-2009.

While these represent the largest layoffs that occurred in 2009, thousands of other biopharmaceutical employees also lost their jobs.  If the life sciences sector is the part of the economy that has been relatively unscathed during the economic downturn, imagine what life must be like for employees in other sectors that have been hard hit!

Until next time...

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Times are tough in the financially-struggling pharmaceutical industry and seemingly getting tougher.

First, Bristol-Myer Squibb (BMS) announced last week that it will freeze salaries but not cut yearly performance bonuses for its employees. One week later, Johnson & Johnson (J&J)—a company known not to be upstaged or outdone by a competitor—is planning on cutting the yearly performance-bonuses for 38% of its workforce and will freeze the salaries of certain other employees.

While BMS publicly announced its salary freeze, J&J plans were uncovered in an internal announcement and other company documents obtained by The Wall Street Journal. According to the Journal article, “The health-care giant told employees Jan. 25 that it is making the moves to standardize compensation across its various businesses and regions, thereby making it easier for its workers to move around within the company. In the U.S., the changes will bring bonus targets in line with market levels, one document said.”

Interestingly, J&J hasn't yet reported its CEO, William Weldon’s compensation for last year. In 2009, Mr. Weldon turned down a salary raise. His total compensation in 2008 fell 4.1% from the year before to $29.4 million, according to the most recent regulatory filing.

The salary freeze and bonus cuts help to explain why a good friend and lifelong J&J employee (25 years and counting) wasn’t too keen on the company during a visit earlier this week. During a conversation, in which I unknowingly lauded J&J’s treatment of its employees, my friend quipped “Looks can be deceiving; J&J is like every other big corporation. People really don’t matter—it’s all about P&L”

Until next time...

Good Luck and Good Job Hunting!!!!

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According to an article that appeared in the Indian publication The Hindu Business Line, GlaxoSmithKline (GSK) is set to increase the size of its Indian marketing and sales force to better support the sale of vaccines and other specialty products. A company executive said that GSK will add another 200 people to its 2,250 member sales and marketing team.

GSK is repositioning itself to be more competitive in developing and emerging markets like India, China, Brazil and elsewhere. The announcement to increase the size of its workforce in India comes only a couple of weeks after the company announced massive global layoffs that would affect at least 4,000 GSK employees.

Hat tip to Ed at Pharmalot!

Until next time...

Good Luck and Good Job Hunting!!!!!!

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After announcing that it would lay off about 4,000 workers two weeks and then refusing to disclose which facilities would be affected,  the British drug maker, GlaxoSmithKline (GSK) today revealed that several hundred workers at it Harlow, Essex  facility will lose their jobs. 

The Harlow facility, formerly the headquarters of SmithKlineBeecham which was taken over by Glaxo almost 10 years ago, is located 25 miles (40 km) northeast of London. Although not confirmed, as many as 380 of the 1,1150 employees at the facility may lose their jobs.

Stay tuned for more GSK layoff updates!

Until next time....

Good Luck and Good Job Hunting!!!!!!!!!!

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Many people, most notably GlaxoSmithKline employees, assumed that GSK management would disclose at its earning call yesterday how many people would lose their jobs in the company’s next round of job cuts announced earlier this week. Surprisingly, management decided not to announce the breadth and depth of layoffs ostensibly increasing the drama and anxiety of its employees about the cuts.

Management’s decision not to disclose the number of employees who would lose their jobs after publicly announced that it would cut up to 4,000 jobs means one of two things according to Jim Edwards of the BNET blog.

“Either that GSK itself has not finished calculating it; or that management believes there’s some sort of PR advantage to not actually saying out loud what everyone already knows.”  

Based on public statements made by GSK spokespeople, Edwards has identified several vulnerable areas where jobs are likely to be cut. These include R&D across the board and one therapeutic area, neuroscience. According to bloggers and insiders who leaked information to the public, the asthma drug Advair may be at risk, as well as metabolic disease product development and sales representatives. Also, there will be reporting structure changes and less emphasis will be place on new product launches in the US. The recent decision to not seek US regulatory approval for GSK’s new, pneumococcal vaccine Synflorix, despite garnering EU approval tends to substantiate this idea.

Elimination of neuroscience as a therapeutic area of interest for GSK was clearly enunciated when the company mentioned during the earnings call

 “Today, we have announced proposals to cease discovery research in selected neuroscience areas, including depression and pain.”

Today, GSK announced that it would close a research center in Verona Italy that specializes in neuroscience research. Approximately 500 workers will lose their jobs after the facility is closed. Unions representing the Italian workers also disclosed in an e-mail message that six facilities worldwide besides Verona will also be closed by GSK.

Less obvious, but clearly written between the lines was the statement made about R&D.

"We have ‘externalised’ approximately 30% of GSK’s discovery research. We are already conducting discovery research with 47 external partners. Our goal is to further increase the level of externally sourced compounds in our pipeline …"

"… We are also looking to reduce R&D infrastructure costs."

Perhaps what may be most troubling to GSK employees who ultimately lose their jobs is the $900 million or more spent on legal fees over the past year. GSK didn’t disclose why the company had incurred such enormous legal bills.

The recent spate of layouts doesn’t mean that any big pharma companies are in financial trouble. As previously mentioned, most of the layoffs are based on future economic predictions and projections which may or may not be realized. Companies are cutting staff and implementing cost savings measures simply to bolster their stock prices and give investors their expected ROI. The economic downturn has provided pharma companies with excellent cover to downsize at will without anybody asking any tough questions. While I feel the pain of workers who have either lost or soon will lose their jobs, the downsizing taking place over the past three years has been a long time in the making. I suspect that many well paid veteran employees turned a blind eye to the internal changes and cues that may have signaled their ultimate demise. 

While downsizing will likely have its anticipated short term effects i.e. bolster flagging stock share prices, it will ultimately hurt the future economic prospects of most big pharma companies. This is because pharma companies will lose many of the talented and experienced workers whose previous hard work and sacrifices contributed to their past successes.  When are the overpaid pharma executives going to realize that it is the rank and file, not them that bring creativity, innovation and ultimately financial rewards to their stakeholders?

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!

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The past couple of weeks have been awful for employees at AstraZeneca and GlaxoSmithKline after both companies announced massive worldwide layoffs. Interestingly, the downsizing that has taken place at Bristol-Myers Squibb (BMS) in recent years has escaped notice; mainly because media attention has been focused on the sale of two of its non-pharmaceutical divisions, Convatec and Mead Johnson. The sale of these two divisions brought in roughly $8.0 billion giving BMS one of the largest cash reserves among major pharmaceutical companies. 

BMS announced two years ago that is would cut its global work force by 10 percent by 2011. Layoffs and cost cutting measures at BMS have been mainly driven by the impending patent expiry of the blockbuster anti-clotting agent Plavix and several other drugs. Plavix reportedly accounts for a disproportionate amount of the company’s annual sale revenues. Despite its new found largess, the company continues to eliminate jobs and shed employees. To make matters worse, BMS confirmed today (as reported on both Pharmalot and the WSJ Health Blog) that it will eliminate pay raises in 2010 for the people who still have jobs at the company. Luckily, bonuses were not eliminated. But as most people who work at big companies will tell you, bonuses are not guaranteed and discretionary. Check out the 2008 total compensation packages (salary, stock options, stock awards, pension etc).

While I don’t profess to have the credentials to be the CEO of a major pharmaceutical company, it doesn’t make sense to me to freeze the salaries of employees who are already overly anxious about whether or not they will have jobs when the next round of layoffs take place. Isn’t morale already bad enough?  Does management think employees will be at the top of their games and willing to work hard if they are constantly worrying whether or not tomorrow may be their last day of work?  Of course, naysayers will say that BMS employees should suck it up because they at least have jobs. However, I contend that management ought to invest a portion of the $8.0 billion in its employees rather then use it to buy several more companies to convince Wall Street analysts that BMS is truly a “next generation biopharmaceutical company.”  After all, employees are any company’s most valuable asset!

Until next time....

Good Luck and Good Job Hunting!!!!!!!!!

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AstraZeneca PLC said today it , or 12 percent of its work force, by 2014 to cut costs as it reported disappointing fourth quarter earnings. The job cuts will be made across all regions and divisions and were necessary because some of the company’s major products including the child asthma medication Pulmicort, which made sales of $1.3 billion in 2009, and breast cancer treatment Arimidex, with $1.92 billion in sales will be losing patent protection in the near future.

CEO David Brennan said the company was extending a cost-cutting program it launched in 2007, which had saved the company $1.6 billion annually at the end of 2009.Extending the program out to 2014 will cost another $2 billion, with expected benefits of $1.9 billion a year by 2014, he said.

Around 12,600 jobs having already been eliminated under the program, although Brennan suggested that the net figure was closer to 4,600 after new roles were created by the company, which employs around 63,000 people worldwide.

The new round of cuts will be global, including sales and marketing, business infrastructure, research and development and the supply chain. The company’s research & development division will lose about 1,800 jobs and according to Brennan there may be some closures of research and development sites or facilities as part of the restructuring. The company is reported to be waiting for regulatory approval of five new products.

Despite claims that the US economy is improving, big pharma continues to downsize its R&D workforce. Call me crazy, but aren’t these the same companies that argue that healthcare reform will stifle innovation and hinder new drug discovery? This begs the question: how do you discover new and novel medicines and treatments if the people who discover and develop drugs no longer work at your company? There is always outsourcing and M&A I suppose.

Until next time...

Good Luck and Good Job Hunting

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While I never was involved in a corporate acquisition or merger, I have many friends who have lived through them and based on their experiences it is a never a “pretty sight.” Merger aftermaths usually feature massive layoffs, executive management disputes and turf wars and corporate culture clashes tha occur when two workforces are forced to merge as one. However, sometimes mergers may be a good thing for struggling companies. To that end, Pfizer may actually benefit from it $68 billion acquisition of Wyeth late last year.

The acquisition will cost at least 20,000 employees their jobs—not a good thing in a national economy where unemployment is well over 10 percent (despite claims to the contrary). However, this merger is strikingly different than Pfizer’s questionable past mergers and acquisitions which were primarily engineered to procure one or two drugs that had blockbuster potential e.g. Lipitor and Celebrex. This time around, Pfizer’s management team is actually re-evaluating its entire drug development portfolio and attempting to expand the company’s pipeline to include vaccines, therapeutic proteins and other biologics. As I previously noted, most major pharmaceutical companies believe that biologics will be the major driver of pharmaceutical markets in the not so distant future.

According to a post on PharmaLive, Pfizer announced that it will discontinue research and development on roughly 100 experimental new drug candidates. Pfizer officials revealed that the company will continue with 500 research projects in six areas of: 1) Alzheimer’s disease, 2) diabetes, 3) pain, 4) cancer and 5) mental illness (including schizophrenia).

Of the 500 projects, 30 drugs are being tested for cancer indications, 10 for Alzheimer’s disease, eight for pain and 11 for inflammation. Further,133 are in various stages of human clinical testing, including several that are awaiting regulatory approval in the US and elsewhere. 

On the biologics front, Pfizer has six vaccines and 27 biopharmaceutical drugs in development. Prior to the Wyeth acquisition, the company only had one vaccine and 16 new biologics that it was testing. Like most other pharmaceutical companies, Pfizer wants to be a major player in the biopharmaceutical and biologics markets by 2015.

Only time will tell!

Until next time,

Good Luck and Good Job Hunting!!!!!!!

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Pfizer today announced that it’s looking to increase its sales force in China to 3,200 by the end of next year, up from about 2,300. The company expects to have sales representatives in about 250 Chinese cities by the end of 2011. It presently has a sales presence in about 185 cities. Previously, Pfizer it will cut nearly 20,000 jobs as part of the Wyeth merger. Over the pass several years more than 50,000 US pharma sales reps have lost their jobs.

Eli Lilly said last fall that it would continue to hire in China, even as it cuts jobs in the U.S. and other developed markets. Novartis is also making a big push into China, hiring hundreds of workers and spending $1 billion to expand a research center in Shanghai.

With business tough in developed markets, drug makers are counting on the developing world for growth and are expanding into biotechnology and generic drug manufacturing.

Like it or not, the emerging markets in China, India, Brazil and elsewhere represent a substantial upside whereas markets in the developing world are becoming less profitable. Drug companies, like most other large multinational companies, always will follow the profit stream not matter where it takes them or at what cost to the folks at home.

Until next time...

 Good Luck and Good Job Hunting (Try China, I hear they are looking for sales reps)

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It is getting difficult to keep track of the job cuts that are happening almost daily at Pfizer. A quick perusal of the job cuts to date indicate that the company has eliminated about 1200 jobs in the past week; 680 in Pennsylvania, 400 in New Jersey and 116 in Rockland County, NY (where I grew up!). While there is currently a lull in activity, I suspect additional job cuts will be forthcoming in the near future.

Merck earlier announced that it was slashing about 500 jobs in New Jersey which continues the ongoing carnage that the NJ pharmaceutical workforce had to endure over the past three years.

Meanwhile, in New England, Charles River Laboratories International announced that it is suspending operations at its Shrewsbury, MA facility by the middle of this year. Approximately 300 workers will be losing their jobs at the facility that focused on preclinical drug development.

Despite claims that the US economy is improving, life sciences layoffs are continuing and job growth is much slower than expected. While some economists aren’t that surprised, I would be nervous and exploring my options if I was employed at a life sciences company!

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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Just when you thought that holding on to a job couldn’t get any worse, Pfizer formally announced yesterday that it would be eliminating 680 jobs from a combined workforce of 4,500 at two former Wyeth facilities in Pennsylvania. According to a company spokesperson, 450 of the layoffs would come from Collegeville and 230 from Great Valley. They will take effect March 12. Persons affected by the layoffs will each qualify for a separation package that will include severance payments, continued medical benefits, and help finding a new job via outplacement services.

While some layoffs were expected, they were much greater than some state legislators were led to believe in earlier discussions with Pfizer. And this isn’t likely to be the end of corporate reorganization at Pfizer PA-based facilities. This is because Pfizer is shutting down the Great Valley facility. There is speculation that after this round of layoffs that the 670 remaining Great Valley employees will be transferred to the Collegeville site or other Pfizer locations. And, it is likely that more Pfizer employees will lose their jobs because Pfizer previously announced that it intended to eliminate as many as 15% or 20,000 jobs after its $68 billion acquisition of Wyeth.

Over the past several months, Pfizer, Eli Lilly, AstraZeneca, Johnson & Johnson and GlaxoSmithKline have announced more than 40,000 job cuts which have devastated the pharmaceutical workforces in Pennsylvania, New Jersey and Delaware. 

Until next time...

Good Luck and hmmmmmm...are there any pharmaceutical jobs left to hunt for?

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Just when you thought things couldn’t get much worse for New Jersey, Merck and Pfizer today disclosed that it will eliminate 900 more jobs in NJ. While the job cuts were expected, it is still bad news for New Jersey’s life sciences workforce.

Based on information provided by the New Jersey Department of Labor website Pfizer will eliminate 400 jobs from Monmouth Junction, NJ where Wyeth previously maintained research offices. Similarly, Merck plans on cutting 500 jobs in Kenilworth, NJ where Schering Plough’s maintained its former headquarters. While it isn’t clear what types of jobs will be affected, cuts are expected in both R&D and sales continuing an ongoing trend that began almost three years ago. In case you haven’t been paying attention, most major American pharmaceutical companies have been eliminating R&D jobs in the US and either outsourcing those activities or building new research facilities in India, China, Brazil and Eastern Europe where there are lost cost, highly trained pharmaceutical scientists.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!

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Losing a job or getting laid off is without a doubt one of the more emotionally devastating events that most people face. Unfortunately, in these troubling financial times, many more people are likely to face this likelihood than any other time in recent history.

However, if you lose or have lost a job, it is important to keep your situation in perspective and realize that it isn’t the end of the world and that there are things that you can do to find a new job! Having said that, like most other things in life you will have to work hard to achieve that goal! This will require organization, commitment and dedication to the job search. And, the best way to conduct a successful job search is to approach it and treat it like a full time job! To that end, attempt to divide each day into manageable list of tasks and allocate sufficient time to accomplish them—just like you would at a full time job. Also, since time is usually no longer an issue, you can spend some of your time researching new opportunities, networking with others or finding new contacts who might be able to help you get your foot in the door at a prospective employer’s company or organization.

Sitting in front of a computer all day, applying for online jobs on company websites and job boards isn’t going to cut it—mostly because you won’t hear back from most of the places where you submitted online job application. In fact, I think that the online approach to job hunting almost guarantees that you will become dejected, depressed and hopeless. 

In my opinion, the best approach to a job search (after losing a job) is to recognize that anything less than full time commitment to finding a new one likely won’t be successful. Based on my own and other’s experience, a successful job search consists of a mixture of focused and disciplined online and IRL activities. Developing and implementing an ordered and strategic job search provides jobseekers with organization and a “structure” that will likely help to ward off feelings of confusion, dejection and hopelessness experienced by most people who have lost jobs. For more ideas and suggestions on how to transform your job search into a full time job please check out this excellent article by Phyllis Korkki.

Until next time....

Good Luck and Good Job Hunting!!!!!!!!

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Sanofi Aventis asked it entire sales force to remain at home the Monday after Thanksgiving to wait for a phone call to see whether or not they still had jobs. Nice way for the affected employees to spend Thanksgiving, eh?

Sanofi-Aventis is laying off an unspecified number of US sales reps, as the firm restructures because of generic exposure on some of its lead products including its blockbuster anti-clotting drug Plavix. The layoffs are part of a transformation that began last year, shortly after new CEO Chris Viehbacher took charge at the company. At the time, Sanofi-Aventis announced plans to cut 10% or less of its 6,500 US reps. According to a post at BNET, the company currently employs about 5,600 reps. Those laid off will get three weeks’ base pay per year of service, up to a maximum of 78 weeks’ base pay.

A company spokesperson said “Sanofi-Aventis U.S. is continuing to evolve in order to deliver greater value to our customers in a rapidly changing business climate. This includes changes to our sales force to better correspond with market dynamics and customer needs. As a part of our continuing transformation, we have identified areas where we will prioritize sales support and others where reductions are necessary.”

Sanofi joins a growing number of pharmaceutical companies that made it something of a tradition to layoff employees immediately before or during the holiday season. I guess company executives believe that the blow may be less devastating if the ex-employees get to spend more time with their families during the holidays. Unlike most corporate executives who are paid millions when they are fired, many laid off pharmaceutical companies will have a tough time finding new employment opportunities in the rapidly shrinking US pharmaceutical job market. At last count, about 59,000 pharmaceutical employees lost their jobs in 2009. Don’t be surprised if more pharmaceutical layoffs are announced in the coming weeks.

Until next time...

Good Luck and Good Job Hunting??????

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After announcing yesterday that it will be reorganizing and closing 6 of 20 R&D sites worldwide, Pfizer/Wyeth announced today that as many as 2000 R&D scientists will lose their jobs. I suspect that others will lose their jobs in the next few months or so.

The Pfizer/Wyeth and Merck Schering Plough mergers signal the beginning of the end of the traditional vertically integrated pharmaceutical business model. It is evident that pharma is shifting away from its almost 100 year focus on R&D and manufacturing to less labor intensive and costly activities like advertising, marketing, sales and distribution—things that drug makers have excelled in the past decade or so. Innovation will likely no longer come from within but from external sources including academia, biotechnology companies and third party vendors including CROs and CMOs.   

While the loss of thousands of R&D scientists will have little impact on the productivity and operations of life sciences companies themselves, it has serious implications for academic institutions that train life sciences graduate students and postdoctoral fellows. In the past, PhD scientists who were unable to find academic jobs too refuge and found gainful employment in the life sciences industry. However, American industrial R&D jobs are becoming harder and harder to find as larger companies continue to outsource those activities, to Asia, South America and Eastern Europe. And, the competition for the remaining jobs is becoming increasingly fierce. Put simply, academic institutions have to begin to realize that we no longer need as many PhD-trained life scientists as we have in the past. At present, there is a glut of PhD life scientists in the US, many of whom can’t find jobs. Perhaps, this should be taken into account before graduate school admissions committees determine the number of new graduate students they will admit next year.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!!!

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Employees of Pfizer/Wyeth were notified earlier today of impending changes and consolidation that will be taking place at the newly combined company. According to internal sources, Cambridge, MA, Groton, CT and Pearl River, NY will be the main centers of the combined company’s East Coast operations and San Francisco and La Jolla/San Diego CA will represent West Coast operations. In Europe, the research facility in Sandwich, England will be the main R&D center with a network of smaller sites, in locations such as Montreal, Ottawa, Cambridge UK, Aberdeen UK, and Dusseldorf, Germany providing expertise in vaccine production and biomanufacturing. The company’s China R&D Center in Shanghai will remain the focal point of operations in Asia,

There will be substantial reductions in headcount and the company’s R&D footprint. These include:

• The former Pfizer headquarters in New London, CT, which will be consolidated into the nearby Groton, CT site. Functions currently located at New London will be relocated to Groton
• Elimination of all R&D activities at Princeton, NJ; Sanford and the Research Triangle Park, NC; Chazy, NY; Rouses Point and Plattsburgh, NY; Gosport, Slough and Taplow, UK
• R&D activity will be substantially reduced at the Collegeville, PA and Pearl River, NY sites. Pearl River will remain a center for vaccine and biopharmaceutical development

I suspect that many of the employees who will lose their jobs as a result of the consolidation have already been or will be notified shortly of their fates. It is unfortunate that pharmaceutical companies continue to lay off thousands of employees when the US unemployment rate continues to rise and will likely hit 12 to 13 percent before it is all said and done. As expected, the combined company is reducing its US R&D operations and will likely outsource or purchase these activities from external sources. It is not a good time to be an American R&D scientist.

Until next time...

Good Luck and Good Job Hunting!!!!!!!!!

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I am attending the Annual Biomedical Research Conference for Minority Students (ABRCMS) in sunny Phoenix, AZ where I will be providing career development guidance to undergraduate and graduate students. Ironically, given the dismal job prospects in the life sciences industry for entry level employees, I will be giving a talk on how to find a job!  Last year's meeting in Orlando was a great one and I expect this one to be just as good.

While I am on the road, it doesn't mean that I won't be keeping track of the goings on back in my neck of the woods. To that end, Merck announced today that it will keep Schering Plough's corporate headquaters in Kenilworth, NJ open. Merck announced the decision today after closing on the $7 billion deal yesterday. This is good news for the NJ residents who currently work at the Kenilworth site. New Jersey has been extremely hard hit by all of the pharmaceutical layoffs in the past few years. Unemployment continues to rise and things will not get any better since conservative Republican Chris Christie was elected governor on Tuesday (he plans on laying off massive numbers of state employees) once he takes office in 2010.

Johnson and Johnson, on the other hand, announced that it was closing research & development facilities in Radnor and Chesterbrook, PA and consolidating those operations at the company's Spring House site. The New Brunswick, N.J., company would not say how many jobs are at those locations now or how many would remain in Spring House after the move, which is to be completed by 2012. These closure come shortly after JnJ announced earlier this week that is was elimating ca 8,200 employees or roughly seven percent of its global workforce.

Let's hope that things begin to improve soon. 

Hat tip to the Pharmalot blog!

Until next time....

Good Luck and Good Job Hunting!!!!!!

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Johnson & Johnson announced today it would eliminate as many as 8,200 jobs, or 7% of its work force, to help the company cope with what it expects will be a slow economic recovery amid damped demand for drugs, medical devices and consumer products. J&J employs about 117, 000 workers globally. While the job cuts will be global, many losing their jobs will be outside of the US. 

J & J joins a growing list of pharmaceutical and life sciences companies that have announced new layoffs. Pfizer Inc., the world’s biggest drugmaker, plans to fire 19,000 workers following its acquisition of Wyeth and had already cut 10,000 positions since 2007. J&J began firing as many as 4,400 employees from its pharmaceutical and stent divisions in late 2007. Finally, Merck recently announced that it will be eliminating 16,000 workers after its merger with Schering Plough closes later this year.

J&J’s announcement is more bad news for New Jersey which is still reeling from the earlier loss of tens of thousands of pharmaceutical and life sciences jobs.

Until next time...

Good Luck and Good Job Hunting (forget New Jersey)

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I received a call today from GDS International, a UK-based b2b publishing company, alerting me to its annual, event called the Next Generation Pharmaceutical Summit (NGP) currently taking place at the Ritz Carlton on Amelia Island in FL. This invitation only event is supposed to bring pharmaceutical and life sciences executives to discuss problems facing the industry and what thing ought to be implemented to insure continued progress and growth.   This is the news coming out of the conference attended by over 50 pharmaceutical and biotechnology executives

Big Pharma concludes that M&A is not the New R&D

With large firms seeking synergies to drive down R&D costs, M&A deals can aid in the transfer of technical knowledge, scalability and reduce time to market. However, previous M&A periods have not alleviated the productivity crisis. “While short term gains emerge from these deals, in the mid to long term, R&D innovation, organic growth, and internal drivers are still key facet’s behind creating a successful company and providing an organization with sustainability.” So says, an executive committee composed of  50 pharmaceutical executives including Jeffery Nye, Chief Medical Officer at Johnson & Johnson, Reinilde Heyrman—VP of Clinical  Development at Daiichi Sankyo, Oscar Laskin—VP of Early Development at Celgene are leading the debate, joined by Ann Wang—VP of Clinical Operations at Human Genome Sciences. These sentiments confirm the notion that the pharmaceutical and biotechnology industries are in transition and suggest that life sciences companies still face many serious challenges in the not too distant future.

While increasing mergers and acquisitions isn’t likely to reinvigorate R&D, newly emerging economic pressures have recently triggered another wave of M&A activity in both sectors. But is this the solution for long-term sustainable growth?  “The willingness for the industry to unite in such a way clearly demonstrates long-term strategies for improved business processes so long-term investment in R&D can be secured” said Drew Contessa the NPG director.

The NPG will reconvene in April 2010 to review recommendations and actionable items.

The realization that M&A is not a solution to correct waning productivity in R&D was a long time coming. It cost about 150,000 pharmaceutical employees their jobs over the past three years. The idea that companies are beginning to recognize that buying or merging with another company is not a panacea or long term fix is a good thing. 

Hopefully, the life sciences industry can learn from its past mistakes.

Until next time....

Good Luck and Good Job Hunting!!!!!! 

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The Pharmalot Blog reported today that AstraZeneca offered all of it sales representatives—numbering 5,000-6,000—a buyout option. However, AstraZeneca prefers to avoid the term buyout and instead instructed its reps to ’self identify’ whether or not they want a package to leave the company. According to the post, an AstraZeneca spokesman declined to discuss how many reps it would like to shed, but did provide this statement:

“AstraZeneca is making changes to our sales force, which will be managed first by looking at vacancies and offering field sales employees the opportunity to self-identify whether they are interested in leaving the company. We will know the full scope of the changes in the coming weeks.”

Like many other pharma companies, AstraZeneca will lose $11.1 billion in patented-protected revenue by the end of 2012 and face stiff generic competition.

Pharma sales reps, like R&D scientists, have been facing tough times over the past three years or so. In the late 1990s, pharma companies hired massive numbers of reps, only to realize several years later, that increasing the number of reps didn’t necessarily translate into increase drug sales. The economic downturn, coupled with projected loss of revenues due to patent expiry of blockbuster drugs over the next few years, provided pharma with an opportunity to downsize. Finally, the growing use of web-based strategies to educate physicians, contract sales forces and a diminishing number of products led to the demise of the pharma rep as we know it.

My recommendation to downsized reps is to get some biotechnology training or device/diagnostic training and to try and leverage previous experience into sales jobs at biotechnology and devices companies. Both industries have enormous growth potential and the transition from pharma to them shouldn’t be all that onerous.

Until next time...

Good Luck and Good Job Hunting!!!!!!

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The fourth quarter is over, earnings are being announced and new budgets for the upcoming fiscal year are being evaluated and tweaked. This means that we have officially entered layoff and closure season. Isn’t it great that big companies wait until right before the holiday season to let employees know whether or not they will have a job next year?

That said, two companies, Bristol Myers Squibb (BMS) and Pfizer/Wyeth are the first to kickoff the 2009-2010 season.

BMS announced that it will lay off 25% of its Abilify sales force. This comes only six months after the drugmaker extended its contract with Otsuka Pharmaceutical to market the anti-psychotic and depression drug. Abilify is BMS’s second best selling medication after Plavix that is co-marketed with Sanofi-Aventis. Otsuka developed the drug and BMS markets and distributes it in the US and several European counties.

Abilify loses patent protection in 2012 and faces stiff generic competition in the anti-psychotic and depression markets. A BMS spokesperson declined to say exactly how many reps would be losing their jobs. However, according to a post on the sorely missed and recently resurrected Pharmalot blog there is speculation that Otsuka may hire some of the layed off BMS reps.

In other news, Pfizer/Wyeth announced that it will be closing its facility in Bridgewater, NJ but expanding operations at its Peapack-Gladstone, NJ location. The Bridgewater facility employs 300 people, 100 of which are involved in technology.  The company announced yesterday that it wouldn't be shutting down Wyeth's Collegeville, PA headquarters.

Over 120,000 employees have been laid off by pharma companies in the past three years, many of whom lived and worked in New Jersey.  Unemployment in NJ is hovering around 10%.

Stay tuned for more updates.

Hat tip to Ed at Pharmalot

Until next time...

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In a previous blog post, I suggested that there was much speculation about whether or not there would be substantial job losses at the various Wyeth sites throughout Pennsylvania after the Wyeth-Pfizer merger closes. As you may recall, company representatives were assuring Pennsylvania legislators that major job cuts and site closure weren’t likely. 

Yesterday, Bernard Poussot, president of Wyeth Pharmaceuticals, sent a message telling employees the company’s Collegeville Headquarters, which employs about 4,000 people, would remain open after the deal closes on October 15, 2009. The fate of employees at other Pennsylvania-based Wyeth facilities remains uncertain.

While this may be good news for some employees at the Collegeville site, it is likely that a substantial number of jobs will be shed after the deal closes. Previously, Pfizer suggested that the combined company intends to shed about 20,000 jobs. I guess the good news is that all 4000 Wyeth employees won’t be losing their jobs!

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The Philadelphia Inquirer reported today that Pennsylvania state legislators, spearheading efforts to retain jobs in the state after the $68 billion Pfizer-Wyeth merger closes next month, said they were fairly confident many positions would remain at Wyeth's regional operations in Collegeville, Great Valley and other sites. Wyeth employs about 4,500 people in the region - about 3,600 in Collegeville and 900 in Great Valley and elsewhere.

One legislator told the Inquirer that "Representatives of both Pfizer and Wyeth have continued to assure us that we should not worry and they have continued to listen to the case that we have made for as many jobs as possible remaining in Pennsylvania." Pfizer, which plans to cut about 20,000 of the combined companies' 130,000 jobs, would not comment yesterday on the statement or the job situation in Pennsylvania. Gee, what a surprise!

If I were a betting man, I would say that there will be massive layoffs in Pennsylvania and elsewhere after the deal closes. Don’t be surprised if Wyeth’s Madison, NJ headquarters and its research facilities in Princeton NJ are first to get the ax. Finally, I am now firmly convinced that you can never trust a thing that a politician says.

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The Belgian chemical manufacturer Solvay announced today that it had agreed to sell its pharmaceutical business unit to Abbott Pharmaceuticals for $6.6 billion. By purchasing Solvay, Abbott gains access to emerging markets in Eastern Europe and Asia along with new therapeutic areas, including hormone therapies and vaccines. Solvay's flu vaccine Influvac will give Abbott an entrant in the burgeoning vaccines market, which is currently dominated by European pharmaceutical giants like GlaxoSmithKline and Novartis.

Abbott already holds U.S. marketing rights for Solvay's Trilipix and TriCor, drugs which raise "good" HDL cholesterol while reducing triglycerides and "bad" LDL cholesterol.

Solvay's other top-selling drugs include the Parkinson's disease treatment Duodopa and hormone therapy drugs AndroGel and Duphaston. It is not clear whether or not the Solvay purchase will affect ongoing pharmaceutical operations or staffing decision in the US. However, I suspect that there will be management changes and layoffs in Europe.

In other news, Johnson & Johnson bought an 18 percent stake in Dutch biotechnology company Crucell NV, which is trying to develop a universal flu vaccine, while competitor Merck acquired the rights to sell Australia-based CSL Ltd.'s Afluria flu vaccine in the U.S.

The Solvay deal is the latest in a string of mergers and acquisitions, as cash-rich pharmaceutical companies race to acquire new products amid looming patent expiry on blockbuster drugs. Earlier this year Swiss drugmaker Roche acquired Genentech following similar deals uniting Pfizer Inc. and Wyeth, and Merck & Co. Inc. with Schering-Plough.

Expect more M&A activity in the life sciences sector before year’s end.

Until next time...

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Eli Lilly & Co announced today that it is eliminating another 5,500 jobs or roughly 14% of its global workforce over the next two years. This would reduce to size of Lilly’s worldwide workforce from 40,500 to 35,000 by 2011. In addition to the job cuts, the company is reorganizing itself into 5 business units and hopes to save about $1.0 billion in annual costs.

These newly announced job cuts come after the company eliminated 4,000 sales representative jobs this past August and restructured its sale force. Also, prior to the recent cuts, Lilly launched the Lilly Phenotypic Drug Discovery Initiative or PD² a new program to ostensibly strengthen relationships with academic institutions to speed drug discovery and thereby reduce its reliance on internal drug discovery efforts to keep its pipeline full.

Unlike other major pharmaceutical companies that conducted massive layoffs over the past two years, Lilly was content, until the past few months, to lay off small numbers of employees and offer others retirement packages. Unfortunately, the loss of patent protection on several of its blockbuster drugs coupled with generic encroachment on several brands and impending health care reform, forced Lilly to take more draconian action.

Layoffs have been something of rarity in the life sciences sector over the past eight months or so, but this is usually the time that marks the beginning of the corporate “layoff season.” Don’t be surprised if other large life sciences companies announce similar layoffs in the coming months. Luckily, the economy seems to be improving and there are signs that hiring is beginning to ramp up in the pharmaceutical, biotechnology and devices industries.

Speaking of pink slips, those of you who have been downsized or find yourself out of a life sciences job may be interested in a new organization called Pink Slip mixers. According to a description on the group’s website:

“Our Pink Slip Mixers are about hundreds of professional, mid- to upper-level executives who are (might be) victims of the "economic downturn" of 2008. Our parties are about banding together, networking and bonding with the recently "Pinked". We will share our experiences of why we were let off, what companies are hiring, and the "buzz words" that specific hiring managers want to hear. Aside from the usual imbibing, commiseration and fun that every pink slip party brings, headhunters, direct-hire companies, and recruiting firms will also on-hand to learn a little bit more about what you do. Maybe you'll meet a new contact, or find a new job!” 

Sounds like these mixers might be good networking opportunities and a place to kick back and commiserate with others who are no longer gainfully employed. I am planning to attend a Pink Slip Mixer when one is organized in the NYC metropolitan area. Like many of you, I lost my full time contract copywriting job over a year ago!

Until next time...

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Sepracor shareholders may be able to sleep better at night without the aid of the company’s top selling insomnia drug Lunesta after agreeing to be purchased on Thursday by Dainippon Sunmitomo Pharma of Japan. Dainippon will pay $2.6 billion for the rights to Lunesta and other drugs in Sepracor’s pipeline. 

This is the third deal in the last two year involving the purchase of American pharmaceutical companies by Japanese drug makers seeking to aggressively expand their reach into the US drug markets. Last year, Takeda Pharmaceutical purchased Cambridge, MA-based Millenium Pharmaceuticals for $8.8 billion and Eisai brought MGI Pharma of Minnesota for $3.9 billion. 

Sepracor, a specialty pharmaceutical company founded in 1984 focused on strategy of developing single isomers or chiral drugs and active metabolites of top selling drugs with the goal of developing a pipeline of proprietary pharmaceutical products. The company’s most successful product is Lunesta, a prescription sleep aid that had sales of almost $500 million in 2008.

Last January, the company layed off 20% of its workforce (350 sales reps, plus 410 contract sales reps) as Lunesta sales slumped because of competition from generic versions of Ambien and branded Ambien CR and revenue losses from its Xopenex COPD franchise. It isn’t clear whether or not more Sepracor will shed more jobs after the Dainippon deal closes sometime next year. 

Stay tuned for updates!

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Eli Lilly & Co. is offering buyouts to 4,000 U.S. sales representatives to eliminate several hundred jobs and restructure its operations. Sales representatives will be offered four months' pay in addition to the typical Eli Lilly severance package, which ranges from two to 18 months' salary depending on seniority. The company had a total of 40,500 employees at the end of 2008.

Lilly’s best-selling drugs include Zyprexa for schizophrenia and bipolar disorder, Cymbalta for depression, Byetta for type 2 diabetes, and Evista for osteoporosis. The patent supporting Zyprexa, which bought in $4.7 billion in revenue last year, will expire in 2011. The patents on the company's next three top drugs —Cymbalta, Humalog insulin, and cancer drug Gemzar —are set to expire in 2013.

The restructuring is expected to start in mid-November and take effect in January.

Sales reps and R&D scientists have suffered the most during pharma’s recent three year downsizing binge. While many R&D jobs have been shipped overseas, pharma sales reps might consider a new career in biotechnology drug sales. Growth in biotechnology and personalized medicine drugs is expected to increase for the foreseeable future.

Until next time...

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Bristol-Myers Squibb (BMS) announced late yesterday that it intends to purchase Princeton, NJ-based Medarex for $2.1 billion. BMS and Medarex were working collaboratively to develop a monoclonal antibody called Ipilimumab as a treatment for late stage melanoma.

The acquisition represents BMS’s public commitment to transform itself into a “next generation pharmaceutical company” with both pharmaceutical and biotechnology products in its arsenal. Last year, BMS bought Kosan Biosciences, Inc a California-based biotechnology company developing novel cancer treatments. Also, as you may recall, BMS lost ImClone to Lilly in a bidding war over Erbitux—a monoclonal antibody-based colorectal cancer treatment that was co-marketed by BMS. 

Medarex was one of the last independent, public, late stage monoclonal antibody development companies in the biotechnology industry. Many of its competitors, like ImClone and Cambridge Antibody Technologies, had already been acquired by big pharma and I was wondering when Medarex would be acquired. I have always held Medarex in high regard and it is a solid and well position company. To that end, I recommended that my mother purchase Medarex stock several years ago telling her that I thought it had a huge upside. Not surprisingly, the stock has been soaring since the announcement; so much so that my mother called me today to tell me how smart I was—go figure.

It is not clear, at present, what effect, if any, the Medarex acquisition will have on the employment situation in New Jersey. Although BMS is headquartered in NYC, it has two large sites in New Jersey, one in Lawrenceville and the other in Plainsboro. As mentioned above Medarex is based in Princeton, NJ. BMS has been steadily downsizing over the past three years and I suspect that there may be more layoffs after the Medarex deal closes.  If there are layoffs, more are likely to occur on the Medarex side of the business.

While I have been critical of some of BMS’ strategic moves in the past, I think the Medarex acquisition is an outstanding one and BMS will likely benefit from it!

Until next time...

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The drug maker Eli Lilly and Co quietly launched a new website today for a program dubbed Lilly Phenotypic Drug Discovery Initiative or PD². According to the company, “The PD² initiative is a unique opportunity for investigators from external institutions to submit proprietary compounds for potential screening in Lilly's phenotypic assay panel. This highly collaborative process is enabled by a web-based application that facilitates efficient transfer of information between Lilly and the investigator. The PD² screening panel is currently comprised of five modules which are relevant to therapeutic areas of long-term strategic interest, including oncology, neurological disorders, and metabolic diseases. This panel may change over time to reflect additional research interests.”

Company officials believe that program will allow it to evaluate and possibly license treatments from biotech companies and academic institutions "that are never fully evaluated as potential drug candidates." The launch of the PD² website—perhaps the first of its kind—clearly sends a signal that pharmaceutical companies are reducing their reliance on internal discovery programs to identify prospective new molecular entities and are eager to enter into licensing deals to find and acquire them. 

Membership in the PD² requires that a legal representative from the investigator's academic institution or biotech company executes a Material Transfer Agreement (MTA). Once the MTA is reviewed and approved by Lilly officials, the institution can create an account. Until that time, use of the site is limited to browsing only. I have no doubt that technology transfer offices at most major universities will be signing up for membership in short order.

I think the PD² initiative is an innovative and timely one given the massive reductions in R&D jobs that have taken place at many pharma companies over the past two years. Expect other pharma companies to follow Lilly’s lead.

Until next time....

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As expected, Merck announced today that it would eliminate an additional 16,000 job after the merger with Schering Plough is completed. The combined company is trying to get its headcount down to around 90,000 employees. The new job cuts represent a 15% reduction in the workforce of the combined company.

While the merger may have made business sense, it doesn’t bode well for future employment for life scientists in New Jersey.

Until next time...

Good Luck and Good Job Hunting (are there any left?)

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After months of complaints by university officials and scientific organizations, the US State Department announced on Tuesday that it is taking action to speed up the delay-plagued visa process for foreign graduate students and post-doctoral researchers.

For the past few years, foreign science and engineering graduate students and postdoctoral seeking to obtain or renew visas have routinely experienced long delays sometimes taking as long as several months. The problem became so acute that students and researchers who left the US often found themselves stranded abroad, not knowing when their visas might be approved.  Not surprisingly, the delays have caused enormous problems for American universities, which heavily rely on foreign nationals to fill slots in graduate and post-doctoral science and engineering programs. Over the last year or so, visa difficulties having discouraged many scientific organizations from holding meetings in the United States. Some life sciences researchers said the apparent reluctance of the United States to accept them encouraged them to seek work in other countries.

The State Department has hired additional personal to deal with the visa backlog but will not say how long it will take to correct the problem. A state department official indicated that they hope to handle routine visa requests within a two week time frame.

While never officially acknowledged, the Bush Administration intentionally slowed the visa process for foreign researchers to “guard against proliferation of science and technical information.” In other words, the visa backlog was likely intentionally created to prevent foreign drug companies and national scientific agencies from infringing on American intellectual property and patent rights—an ongoing practice that clearly frightened many of the jingoistic officials running the Bush State Department.

However, what the Bush administration failed to understand was that a majority of foreign students who train in the US want to remain here after completion of their studies. The visa backlog and its protectionist intent forced many foreign nationals to forgo their US training and return to their home countries to seek employment. This was beginning to threaten scientific and technical innovation in US laboratories because for the past decade or longer American students have shied away from science and engineering to pursue careers in business and computer science. Ironically, the Bush Administration’s protectionist leanings may have contributed—more than they care to admit—

 to the massive job cuts that have taken place at American life sciences companies in the past few years because of availability of a US-trained work forces in countries like India and China. This provides American life sciences companies with reasonable assurances that preclinical and clinical research outsourced to these countries will be conducted according to US standards. Further, it also provides foreign companies with unbridled access to a growing cadre of US-trained scientists that will enable them to compete on a head-to-head basis with American life sciences companies.

Fortunately, the Obama Administration, unlike the previous one, delivers on its promises and appears to be willing to work hard to restore science and technology to its rightful place in American society.

Until next time...

Good Luck and Good Job Hunting (it may now be possible for many foreign students!)

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Over the past three years, more than 90,000 pharmaceutical employees have been layed off. While many of these former employees were drug reps, a majority who lost their jobs were R&D scientists. If drug makers have already jettisioned tens of thousands of R&D jobs, how is the next generation of medicines going to be discovered and developed? Like it or not, pharmaceutical and biotechnology R&D is beginning to be outsourced—much like information technology (IT) was in the late 1990s. And, like the IT industry much of R&D is being outsourced to countries like India and China. This should not be surprising because for the past 20 years or so, most of the people receiving PhDs in the life sciences were foreign nationals—many of whom were unable to stay in the US because of post-9/11 immigration policies and visa quotas. Without many options, many had no choice but to return to their home countries to seek employment and in some at contract research organizations (CROs) that specialize in pharmaceutical and biotechnology R&D.

According to a recent article written by J B Gupta Senior Vice President Collaborative Research GVK Biosciences Pvt. Ltd. India, for the last five years or so, Indian CROs like GVK Biosciences, Aurigene, Syngene, Advinus, Jubilant, Suven Life Sciences, Sai Lab, Accunova, iGate etc. have been positioning themselves as purveyors of R&D services to pharmaceutical and biotechnology companies. These efforts have apparently paid off! Companies like Merck, GlaxoSmithKline, Forrest Laboratories, Eli Lilly & Co, Johnson & Johnson, Merck Serono, Wyeth, Bristol Myers Squibb and others have entered into strategic R&D partnerships with many of India’s leading CROs. 

A recent study by the Kauffman Foundation suggests that India better positioned and ahead of China in R&D outsourcing. Further, the pace at which discovery collaborations are being established in India suggests that the western pharmaceutical industry is looking to Indian CROs not only to cut costs but to innovate as well.

Unfortunately, while this doesn’t bode well for American scientists, the US has nobody to blame but itself. Wrong-headed immigration policies coupled with inadequate training for life scientists who want to pursue industrial careers are largely responsible for the current R&D outsourcing activities. Like IT, I suspect that outsourcing will work for some companies but not others. Nevertheless, I think that outsourcing is here to stay and like it or not American life scientists will have no choice but to adapt to the “new normal.”

Until next time...

Good Luck and Good Job Hunting (try India or China)

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Medtronics, the world's largest medical-device company, announced today that it will lay off 1,500-1,800 employees after posting a fiscal fourth-quarter profit that plunged 69 percent on slipping sales,restructuring and other charges. About 400 employees already have accepted buyout offers and will leave the company by the end of the month.

Until now, the medical devices and diagnostic industries, unlike pharma and biotech had had remained unscathed by the current economic downturn. Medtronic’s financial woes are mainly a result of questions about its implantable devices which have come under fire recently because of safety concerns. Nevertheless, don’t be surprised if you see other medical devices and diagnostic companies begin to layoff workers as the financial crisis deepens and medical and healthcare costs continue to rise.

Hat tip to Iguana Bio.

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As the recession slogs on, it is likely that many more people will lose their jobs and you might find yourself in the unenviable position of having to commiserate or console a friend or colleague was layed off. Not surprisingly, this is often a difficult and delicate situation that requires some sensitivity and tact. 

Because many of us have never been layed off or fired, it is often difficult to know what to say or more importantly determine what a person who lost their job may want from family and friends. To that end, there was a wonderful article in today’s New York Times that offers some insightful suggestions and guidance on navigating a conversation or meeting with a friend or colleague who recently lost their job.

Read and learn!!!!!

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Since 2007, approximately 80,000 pharmaceutical jobs have been eliminated. The recent consolidation in the industry, e.g., Merck-Schering, Pfizer-Wyeth and Roche-Genentech suggests that many more life sciences jobs will be lost over the next year or so. Typically, to avoid law suits and possible discrimination claims, most companies will layoff a mixture of experienced and entry level employees that cover the racial, religious and age spectra. For those of you who may not know, Americans who are 40 and older constitute a “protected class of employees.” In other words, companies that layoff employees cannot disproportionately give pink slips to employees 40 years of age or older. This law was enacted because older employees typically have higher salaries and have accrued more benefits and vacation time than their more junior counterparts and eliminating them can drastically cut costs. While most companies are careful to layoff a mixture of junior and senior employees during large layoffs, a quick perusal of the demographics of employees who lose their jobs reveals that many of them are older, more experienced workers. Sacrificing a few entry level employees (to prevent any red flags) is worth it to the accountants who charged with cutting costs and orchestrating large corporate layoffs.

Unlike consumer goods, pharmaceutical and biotechnology drug development is arcane, complex and may take up to 15 years to complete. There are many “go” or “no go” decisions that must be made during the drug development process. Typically, these decisions are rendered by experienced employees who have been “down the road” many times before and are able to recognize the oft-time nuanced attributes of successful drug candidates. Without the benefit of these employee and their experiences, drug companies may struggle to make the “right decisions” for new products being developed. Also, the loss of experienced employees can disrupt the flow of essential “corporate knowledge” to entry level and more junior employees. This is important because— while most entry level and junior employees are academically and technically qualified—it usually takes them years (under the tutelage of mentors and senior employees) to understand a company’s best practices. Put simply, the unrelenting loss of experienced pharmaceutical workers can alter the standing or dominance of pharmaceutical companies in certain therapeutic areas. While massive layoffs of experienced pharmaceutical employees bolster drug stock prices in the short term, the long term effects of these layoffs on the overall health of the pharmaceutical industry remains uncertain.

Jeff Kindler, Pfizer’s CEO, mentioned yesterday during a CNBC interview, that eight Wyeth senior executives will keep their jobs after the Pfizer-Wyeth deal closes later this year. Not surprisingly, he failed to mention how many “rank and file” employees of the combined company would keep their jobs after the merger. Don’t be shocked when Pfizer-Wyeth announces massive layoffs after the deal closes—Pfizer’s stock price has fallen 21% since it announced the Wyeth acquisition late last fall.

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Late Thursday, after 8 months of difficult and often acrimonious negotiations, Genentech’s board finally caved and agreed to allow Roche to purchase the remaining 44% of the outstanding Genentech shares that it doesn’t already own. The price: $95 per share—less than the $112 per share that Genentech’s board and management team wanted —but better than the $86.50 per share that was tendered last fall.

While Roche contends that it will continue to run Genentech as an autonomously operating business unit, many Genentech employees are dubious. I suspect that many DNA (Genentech’s stock symbol) employees will embrace a “wait and see” attitude before any decisions are made about whether or not to stay at the “new company.” Roche’s greatest challenge will be integrating the two companies without ruining Genentech’s innovative culture and immediately sending its best scientists and management team out the door. Pharma and biotech corporate cultures are very different from one another and many biotech employees find it difficult to adapt to big pharma’s slow-moving and anachronistic approach to drug development. As previously reported, US business operations of both companies will be based at Genentech’s headquarters in South San Francisco, CA rather than in Nutley, NJ, where Roche’s American business is currently based. This is not good news for many of Roche’s Nutley employees. Roche has been trying unsuccessfully for years to jettison the Nutley site and it seems likely now. Don’t be surprised if you see a mass exodus at the Nutley site. All of Roche’s US products will be sold under the Genentech brand.

Roche’s purchase of Genentech, America’s oldest biotechnology company (started in 1976) and considered by many to be the crown jewel of the industry, truly signals the end of an era. Let’s hope that another “Genentech” (and others like it) emerge as the US biotechnology industry continues to evolve in the 21^st century.

Until next time...

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In the wake of last week’s Pfizer-Wyeth M&A feeding frenzy, I suspect that most analysts were hoping that this week would be a little quieter. Unfortunately for many pharmaceutical company employees, this week may be shaping up to be almost as nerve-wracking as last week!and declared that it was on the hunt for a merger or acquisition partner. A ll of the usual suspects have been cited as possibilities. They include: Bristol Myers Squibb (Plavix, Erbitux, Orencia Abilify) , Amgen (EPO, Aranesp, Neupogen, Neulasta and Enbrel), Biogen-Idec (Avonex, Tsyabri and Rituxan) (Actavis (generics) Ratiopharm (generics) and Crucell (vaccines). The hands on favorite and most likely target would be Bristol Myers Squibb because the two companies co-market Plavix, their top selling drug that is due to lose patent protection in the next year or so. That said, in this environment anything can happen. 

In other news, GlaxoSmithKline announced that it will be cutting 6,000 jobs later this week when the company puts out financial results. The company began reorganizing itself in 2007 and will continue to do over the next few years to deal with generic encroachment on several of its top selling drugs. Glaxo employs about 100,000 people worldwide. Analysts suspect that many of the job cuts will occur in the UK and that sales rep may be hit the hardest in this latest round of layoffs.

Until next time…

 Good Luck and Good Job Hunting!!!!!

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I received an e-message from a reader who alerted me about new information and rumors that are swirling about the layoffs announced yesterday by Pfizer.  For more info, check out the post at the Daily Anchor.

Seems like other things may be brewing at Pfizer.

Until next time...

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Long rumored, Pfizer announced yesterday that it will eliminate another 800 research jobs outside of its six core therapeutic areas: cancer, pain, inflammation, diabetes, Alzheimer’s disease and schizophrenia. The new cuts represent 5 to 8 percent of Pfizer’s approximately 10,000 researchers worldwide. According to a company spokesperson, the company will continue to evaluate its current staffing to make decisions that are consistent with its future goals. In short, expect more layoffs to occur in the near future.

Industry analysts expect additional cuts to occur in R&D and Pfizer’s dwindling sales force. To date, Pfizer has eliminated about 10,000 jobs, mostly in R&D and sales. Pfizer became the world’s largest pharmaceutical after going on a 12 year buying spree that began in 1996 after its acquisition of Warner Lambert, the company that developed the blockbuster anti-cholesterol drug Lipitor. The company currently employs about 85,000 people worldwide.

Wall Street rewarded Pfizer’s decision to layoff more scientists by pushing its stock share price up 1.3% yesterday. Rewarding a company for eliminating one of its most important and valuable assets has never made sense to me. But, then again, I am a scientist not an MBA-toting Wall Street analyst—what do I know?

Until next time…

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GlaxoSmithKline announced late last fall that it would acquire California-based Genelabs for $57 million in cash. The deal closed yesterday and the exodus began today.

According to sources at the company, Genelabs employees will be offered a week of severance pay for each year of service. Genelabs executives and employees have been given pink slips.

By purchasing Genelabs, GSK establishes a presence on the West Coast. Also, it will strengthen its effort to develop therapies against the hepatitis C virus. Genelabs will become part of Glaxo’s drug discovery organization and its hepatitis C virus program.

Luckily for former Genelabs employees, California biotechnology companies are still hiring.

Until next time…

Good Luck and Good Job Hunting!!!!!! 

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Making a profit (and a large one at that) is the primary objective and driving principle of capitalism. That said, the for-profit sector is currently in a shambles—mostly due to greed and stupidity of the so-called stewards of the American economy. Maybe it is time for many of us to abandon corporate greed in favor of job opportunities in the more philanthropic and altruistic not-for-profit sector. I was surprised to learn that, despite the current economic downturn, there are growing numbers of jobs at non-for-profit hospitals, clinics, civic organizations and education (pre-school, primary and secondary).

While these jobs typically pay less than for-profit ones, their for-profit equivalents may no longer exist. And, as we all know too well, having any job at all is a big plus in these dismal economic times. Unfortunately, not-for-profit jobs like their for-profit counterparts are not immune to economic realities and layoffs. Nevertheless, there are currently not-for-profit jobs out there and now may be as good of a time as any to check them out!

Until next time…

Good Luck and Good Job Hunting!!!!!!!
 

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For those of you who haven’t been able to keep up with the latest pharma layoffs, I came across an article in the Philadelphia Business Journal that does an excellent job of recapping all of the major life sciences layoffs that have taken place in the past year or so. The recent massive pharma layoffs prompted William Ashton, Acting Dean of the University of the Sciences in Philadelphia PA to say “I was in the pharmaceutical industry for 28 years. I’ve never seen such a sea change as is occurring right now. This is really dramatic.” Further, Dr. Ashton predicted that drug companies will increase their use of contract sales forces (CSFs) and contract research organizations (CROs) to contain expenses and that staffing firms will be the winners.

This led to me to wonder what Dean Ashton has been doing for the past 10 years or so because the life sciences industry has already increased its reliance on CROs and CSFs. A quick perusal of the pharma and biotech employees who lost their jobs over the past few years reveals that a majority of them were in sales and R&D. I don’t know whether or not I should break the news to Dean Ashton, but the future is already upon us—another example of how out of touch academia is with industry in the 21^st century.

I think that it is time for industry executives and academicians to begin a serious dialog to determine the type of training that would be appropriate for individuals seeking jobs in the life sciences industry. A failure to do so will likely have a negative adverse effect on the continued growth and future success of the US life science industry.

Until next time…

Good Luck and Good Job Hunting!!!!!

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In a  previous post,  I suggested that more layoffs would occur at Bristol-Myers Squib (BMS) by December, 1, 2008. The Pharmalot Blog reported today that 800 more BMS employees ( including scientists) would lose their jobs before the end of 2008. Okay, so I was off by about two weeks.

A company spokesperson told the Pharmalot folks that “We are reducing the global Bristol-Myers Squibb workforce as part of our previously announced second wave of productivity initiatives designed to enhance our ability to address the significant challenges and uncertainties our company faces in the short- and long-term. Headcount reductions associated with the second wave of productivity initiatives will continue through 2010, with a goal of a 10 percent reduction in our global workforce. This [layoff of 800] is in addition to the 10 percent workforce reduction previously announced in December 2007.” 

Things are obviously not going well at BMS these days. Look for more layoffs in early 2009 and beyond. Who do you think is going to buy BMS?

Until next time…

Good Luck and Good Job Hunting (Try Lilly I hear ImClone is looking for a few good men and women)

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Pfizer announced today that it will eliminate almost 1,000 jobs in France through layoffs or voluntary departures. Gerard Bouquet, vice-president of Pfizer France, announced that "This new organization will take effect from Dec. 1, 2009 and there will be no forced layoffs before that date.” The cuts will affect Pfizer’s sales force and at it Paris-based headquarters.

Today’s announcement comes just a few days after Rod MacKenzie, Pfizer’s worldwide head of discovery research told reporters “Given the complexity of the changes within research, I have concluded that we will not be able to provide that clarity [for the layoffs] or communicate them by the end of the year." While it appears that there may some confusion regarding American workers, this is clearly not the case for Pfizer’s European employees.

Until next time…

Good Luck and Good Job Hunting

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I know this is kind of odd, but I have recently begun to wonder which life sciences companies have layed off the most employees this past year. Well, for those of you out there who were also wondering we don't have to wonder any longer because Ed Silverman over at the Pharmalot blog has conveniently compiled a list of the top offenders for us. For those of you who may be wondering which company was number one on the list, it’s name begins with a “P” and ends with an “r.”

Until next time…

Good Luck and Good Job Hunting!!!!!!!!
 

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Pfizer may announce new job cuts by the end of next month as the company tries to curb spending before cheaper generic versions of its top- selling drug Lipitor flood the market in 2010. The cuts will likely take place in sales and marketing—Pfizer has cut more than 14, 000 jobs since 2007. 

Aren’t you glad that you didn’t take me up on that land deal in Florida?

Until next time…

Good Luck and Hang On!!!!!!!!!!!

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The Pharmalot blog reported today that Bristol-Myers Squibb will be laying off 5% of its workforce (~ 34 employees) by year’s end at its manufacturing facility near Syracuse, NY. And, Sanofi-Aventis announced that it will be giving pink slips to about 10% of its sales force —about 650 reps—before the end of the year.

To make matters worse, Merck released its annual revenue projections for 2009 today which suggest that its earnings and revenue will not meet Wall Street expectations. Merck recently “cleaned house” and eliminated thousands of scientific and mid-management jobs. The list of pharmaceutical companies that have downsized in 2008 includes Merck, BMS, GlaxoSmithKline, Novartis, Schering Plough, Boehringer Ingelheim, Wyeth and Sanofi-Aventis. I probably missed a few but who is counting?

Until next time….

Good Luck and Hold On to Your Job (if you can)

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Recently, I have come across posts on blogs and websites reporting on lay offs and cost-cutting measures that are taking place at some biotechnology companies. A good example of this is a post that appeared yesterday on the Fierce Biotech Web Site. The headline read: “New round of layoffs, cost-cutting at biotechs.”  I thought “OMG this can’t be happening—not the biotechnology industry too!”

However, I am happy to report that many  of my concerns were assuaged after I read the post and realized that the reported downsizing was taking place at small companies, most of which were on shaky ground before the recession even began. Some of the companies that were mentioned included: Titan Pharmaceuticals, Pressure BioSciences, Insite Vision, WuXi PharmaTech Cayman and Targeted Genetics—not exactly titans (pardon the wordplay) of the biotechnology industry. 

There is no question that the current economic downturn will hurt some biotechnology companies (mostly because debt financing is so difficult to secure these days). That said, I think that the biotech industry may struggle a bit over the next couple of years but it will survive because it is in much better financial shape than most other American industries. 

It is important to note that the downsizing and cost-cutting taking place at many pharmaceutical companies is based almost exclusively on projected lost revenues that may occur 2-5 years two years from now—when many blockbusters drugs begin to lose patent protection— not on immediate cash concerns (most pharma companies have plenty of cash on hand). Pharma companies began downsizing in earnest about two years ago because they realized that they had gotten too big and their empty pipelines could no longer justify employing large numbers of unproductive employees. In my opinion, the current economic downturn provided pharmaceutical companies with a good excuse to continue to lay off employees, slash costs and maintain their stock prices. 

Many of the companies mentioned in the Fierce Biotech post have been around for 5-10 years and haven’t been profitable since their inception. As a former business partner once said to me “You don’t really have a business unless you have a product to sell and are profitable.” I suspect that many of these so-called biotechnology “companies” will go out of business—not because of the recession—but because they were unable to develop financially-viable products or services.

 Until next time…  

 Good Luck and Good Job Hunting!!!!!

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According to a recent report from the consulting firm Ernst and Young, cost cutting and downsizing are no longer the primary objectives for most pharmaceutical companies. Instead, they are mulling over the new challenges that universal health care may bring and how to better reach consumers in emerging markets. 

In a recent interview, Carolyn Buck Luce, one of the paper’s co-authors said “in our previous report, cost containment was one of the most important initiatives. In this report we found more of a balanced approach where optimizing cost was [just] one the many objectives. Only 40 percent of the executives said optimizing costs was their most important initiative, compared to a similar study in 2007 where 92 percent of those surveyed ranked cost reduction as their main initiative. In the latest survey, 66 percent of executives said the most important strategic initiative was reinvigorating the R&D pipeline, while 40 percent said expanding into new markets and restructuring their marketing and sales programs to become more customer-centric were their main areas of focus. “

One of the most telling quotes in the piece is: “There was an awful lot of focus on costs a year ago, when companies realized there was a lot of fat in their companies and a lot of opportunity to cut costs.” Does that mean that pharma really didn’t have to lay off tens of thousands of employees over the past year? It kind of makes you wonder doesn’t it? And, if you believe that pharma is truly finished with downsizing--would you be interested in a great deal on some land in Florida?

Until next time…

Good Luck and Try to Hang On to Your Job!!!!!!!!

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Astra Zeneca announced today that it would cut 1400 jobs and close several manufacturing facilities worldwide. According to a post on the Pharmalot blog “about 600 full-time jobs will be lost in Sweden as packaging operations are expanded in Wuxi, China. The cuts will come on top of the 7,600 positions the drugmaker plans to eliminate by 2010. The plant closings will occur in Spain, Belgium and Sweden by 2013. Manufacturing jobs will also be trimmed in Sweden and the UK as production is shifted to lower-cost countries in emerging markets.”

On Tuesday Wyeth disclosed that it was eliminating 70 positions at its Pearl River, New York, facility (which employs 3,200 workers, 118 employees at its Rouses Point facility in upstate New York that employs 725 people work, and 124 jobs at its Sanford, North Carolina manufacturing facility. Ironically, as more and more US workers are laid off, many big pharma companies like Merck, Pfizer and GlaxoSmithKline are expanding operations at their research facilities in India. In fact, Merck is doubling its headcount from 800 to 1,600 employees at its research facility in India that was opened a little over a year ago.

Until next time…

Good Luck and Keep on Looking!!!!

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Bristol-Myers Squibb (BMS) made a presentation this morning at the Credit Suisse Healthcare Conference that showed the company plans on saving an additional $2.5 billion in “productivity initiatives.” According to its new CFO, the company plans to squeeze the savings out of “headcount and related costs” — which  likely means more downsizing and layoffs.  Rumors have it that these job cuts will take place by December 1, 2008 just prior to when employee bonuses are traditionally decided.

To make matters worse, the Pharmalot blog reported today  that "the drugmaker earlier this week sent a voicemail to employees saying a 2 percent cost of living increase will be given this year to those who are meeting or exceeding performance standards."  The announcement has lead to speculation among BMS employees whether or not the same ceiling will be applied to the bonuses and stock rewards handed to Bristol-Myers CEO Jim Cornelius and members of his executive team.

Heavy losses incurred  by its former CFO who "bet the store" on mortgage-backed securities coupled with the recent, highly publicized failure of Jim Cornelius to purchase ImClone (to gain complete control over the multi-billion dollar Erbitux franchise) suggests that the future of the company may be in serious jeopardy.

Until next time…

Good Luck and Good Job Hunting!!!!!!!

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Last month, 240,000 American workers lost their jobs. Many of these jobs were lost as a result of corporate lay offs and restructuring—things that are likely to continue as we attempt to navigate a course through these financially troubling times. Unlike being fired, lay offs and job losses that result from restructuring have little to do with individual job performances and everything to do with budget constraints and reductions. That said how should a person who is laid off from a job deal with it on a resume when looking for a new job? I found a well crafted article that provides some ideas and solutions to deal with this often vexing problem.

Read and learn!

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!!

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According to the WSJ Health Blog “Wyeth is overhauling its early-stage research by slashing in half the number of therapeutic areas and diseases for which it will pursue new medicines. The idea is to concentrate on more innovative products and get them to market faster.” Whenever large companies restructure or announce reorganization plans, job cuts are soon to follow. So, if you are a Wyeth employee I recommend updating that resume as soon as possible!

People close to the R&D restructuring (part of a larger plan, dubbed Project Impact) said the overall number of scientific jobs won’t change under the plan but some scientists will be cut because their skills aren’t transferable to other areas. Wyeth will eliminate discovery work in women’ health, reduce its therapeutic areas from 14 to 6 and continue to focus vaccines and biologics, where it has had great success with its pediatric pneumococcal vaccine, Prevnar, and the anti-inflammatory biologic Enbrel.

Wyeth joins several pharmaceutical companies, including Bristol-Myers Squibb and Pfizer, which have already decided to narrow the focus of their development efforts and focus more on biotechnology products. Don’t be surprise if other pharmaceutical companies announce similar restructuring plans. I predict that within 10 years or so, pharma companies will no conduct basic discovery research and abandon their internal pipelines. Instead, they will become drug “clearing houses” that specialize in developing products that were either purchased or in-licensed from smaller biotechnology and specialty pharmaceutical companies.

Until next time…

Good Luck and Good Job Hunting!!!!!!!

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 Merck announced today that as part of its ongoing restructuring plan to cut costs it will eliminate approximately 7,200 positions — 6,800 active employees and 400 vacancies — across all areas of the Company worldwide by the end of 2011.  This amounts to a 12 percent reduction in the company’s workforce. About 40 percent of the total reductions will occur in the United States.  To streamline management layers across the Company, Merck will reduce its total number of senior and mid-level executives by approximately 25 percent.  These positions are in addition to the 10,400 positions.  As of Sept. 30, Merck has approximately 56,700 employees. In addition to the layoffs, Merck will close three research facilities; one in Tsukuba, Japan; another in Pomezia, Italy and one in Seattle Washington by the end of 2009.

Merck expects the 2008 cutbacks to save the company $3.8 billion to $4.2 billion over the next five years. BioJobBlog reported several weeks ago that Merck had been quietly laying off employees since September. I suspect that today’s announcement comes as no surprise to employees who still work at the Company.

New Jersey once dubbed “America’s medicine chest” is starting to look less full!

Until next time…

Good Luck and Good Job Hunting

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The Pharmalot blog reported today that Pfizer will likely layoff large numbers of R&D personnel over the next few weeks and months. This should not come as a surprise to Pfizer employees because the company recently announced that it would eliminate research in certain therapeutic areas including heart disease and obesity as part of a global reorganization plan. According to the company, the reorganization is expected to be completed by year’s end and operational in 2009. Inside sources say that the job losses should be significant and far reaching.

In other news, BioJobBlog learned today that Bristol Myers Squibb plans to announce company-wide layoffs by December 1, 2008. As previously reported by BioJobBlog, BMS has been quietly downsizing since last spring because of the impending patent expiry (in 2011) of its blockbuster anticlotting drug Plavix. BMS, unlike Pfizer, has been extremely circumspect about its impending layoffs which is causing a great deal of anxiety among its employees. The recent sale of ImClone, BMS’s partner for the cancer drug Erbitux, to Eli Lilly will undoubtedly contribute to additional layoffs at BMS in the future. Currently, Erbitux is BMS’s top selling biopharmaceutical product.

It goes without saying that it is not a good time to be a pharma employee. Unfortunately, as the old adage goes “things are likely to get worse before they get better”. 

Until next time…

Good Luck and Good Job Hunting!!!!!!!!!

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The Pharmalot Blog reported today that Schering Plough will eliminate 1,000sales jobs or 20% of its sales force by October. This latest round of layoffs is part of a reorganization plan that was announced last year to cut 10% of it workforce by 2012 (although must of the downsizing will occur by 2010). The reorganization was announced shortly after Schering purchased Organon Biosciences and the “wheels came off” of its Zetia/Vytorin anti-cholesterol medication franchise.

In other news, BioJobBlog heard through the grapevine that Merck has been quietly laying off workers (since Labor Day) in an attempt to reduce its workforce by 20% over the next few years. Many very talented people who have been with Merck for years are looking for new jobs.

Finally, Montvale, NJ-based Memory Pharmaceuticals announced that it was laying off 55 workers or roughly 50% of its workforce. The company, which went public in a much heralded IPO in 2004, focuses on developing treatments for cognitive disorders. Although the company has never been profitable, the person who ran the company for the past three years (first as president, then CEO and finally CFO) earned $876,807 last year. Not surprisingly, he will be leaving the company as part of the downsizing initiative.

The ongoing pharma slowdown coupled with this week’s Wall Street meltdown (many people who work on Wall Street live in New Jersey) should make New Jersey a very challenging and interesting place to live in the coming months.

Hat tip to Ed at Pharmalot.

Until next time….

Good Luck and Good Job Hunting (I would avoid NJ)!!!!!!

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Astellas, a company formed in 2005 following the merger of Japanese-based pharmaceutical giants, Yamanouchi Pharmaceutical Co. Ltd. and Fujisawa Pharmaceutical Co. Ltd, announced that it is hoping that 200 pharmaceutical workers in its production facility in Norman, OK will take early retirement to cut labor costs. The downsizing is in response to impending patent expiry of the company’s blockbuster urology product Flomax.

A company spokesperson said “The early retirement program seeks to reduce the workforce by about 30 percent, which would leave about 140 people at the Norman plant.” The loss of these jobs is likely to have a substantial economic impact on the small Oklahoma town many of whose residents have worked at the plant for over 20 years.

Astellas employees around 17,000 workers worldwide. When pharmaceutical jobs are cut in OK, you know the industry is in bad shape.

Hat tip to Ed at Pharmalot

Until next time…

Good Luck and Good Job Hunting!!!!!!

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A little over a year ago, Bristol-Myers Squibb (BMS) launched its “productivity transformation initiative” (PTI) designed to “transform” the company into a next generation biopharma leader. As most of you may already know, PTI is corporate speak for layoffs and downsizing.

The PTI was largely in response to impending loss of patent protection in 2011 of its blockbuster Plavix, an anti-thrombosis drug that BMS co-markets with Sanofi Aventis. While BMS has a deep and innovative drug pipeline, the likelihood that the company will be able to replace Plavix revenues with one of its investigational drugs is remote.

To make matters worse, late last week, one of Plavix’s likely successors, an investigational anti-clotting drug called apixaban (being co-developed with Pfizer) failed to meet its primary clinical endpoints in a pivotal Phase III clinical trial called Advance 1 which was designed to evaluate the drug for prevention of venous thromboembolism in patients undergoing total knee replacement.  The 3,195-patient study compared apixaban, an oral Factor Xa inhibitor given at a dose of 2.5 mg, twice daily, to twice-daily 30mg injections of Sanofi-Aventis’ Lovenox (enoxaparin). This late stage clinical failure prompted the company to announce that it would no longer seek approval of apixaban in 2009 as previously planned.

Early this week, BMS ratcheted up the PTI and imposed a total hiring freeze for all permanent employees, consultants and leased workers (contractors). Previously, vacated permanent or temporary positions could be refilled if appropriate, qualified job candidates were identified. Finally, the company announced today that it would permanently ground its corporate fleet of jets that was operating out of Mercer County Airport in Trenton, NJ. According to an article in my local paper, the Trenton Times, BMS plans to sell four aircraft and layoff about 32 employees, mostly pilots and mechanics. 

Despite all of the other PTI initiatives implemented to date, the decision to sell all of its corporate jets sends a clear signal to stakeholders that BMS truly “means business”! I guess Jim Cornelius and other BMS executives will have to book commercial flights or take Amtrak to out-of-town meetings for the foreseeable future. That said, I doubt that Jim and others will be driving or taking the train to meetings in New York City or Washington—the corporate helicopter fleet is still operating!!!!!

Until next time….

Good Luck and Good Job Hunting (forget BMS)!!!!!!!

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Pfizer announced today that is it closing a manufacturing facility in Cork Ireland.  Approximately 180 people will lose their jobs. Pfizer tried to sell the plant but was unable to find a buyer. The Cork plant will officially be closed sometime in 2009.  Another of Pfizer’s five Irish manufacturing facilities located in Ringaskiddy is also on the block. That facility employs about 300 people. Pfizer cites the 2006 failure of torcetrapib, an experimental cholesterol drug as the reason for the plant closings.

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Indianapolis-based Eli Lilly & Co announced today that it will transfer its clinical trial monitoring and data management operations to Quintiles and i3.  About half of the affected 265 Eli Lilly employees will lose their jobs.

Like other pharma companies, Lilly is looking at ways to cut costs. And as everyone knows, the best way to save money is to outsource operations and lay-off full time employees who are expensive because of high salaries and benefits.

Until next time….

Good Luck and Good Job Hunting!!!!!!

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Despite an increase in profits, BMS announced today that it will continue with its Productivity Transformation Initiative (PTI) that was instituted last fall. According to the PTI, BMS must save $1.0 billion over the next 2 years. Of course, the only way to accomplish this is by laying off employees whose jobs are not directly related to the process of transforming BMS into a “ next generation biopharma company” (Would somebody please write me and explain what that means)???? I suspect that BMS employees will be receiving “pink slips” after Labor Day.

This has been a devastating week for the NJ-based pharmaceutical industry. First, Teva announced last week that it will buy Montvale NJ-based Barr Pharmaceuticals and then earlier this week Roche issued a press release indicating that it will move its corporate headquarters from Nutley NJ to South San Francisco (Genentech’s headquarters) by 2010. The impending layoffs at BMS coupled with job freezes and downsizing at other NJ pharma companies like Schering Plough and Merck may signal the beginning of the end of New Jersey’s status as the “nation’s medicine chest.”

Until next time….

Good Luck and Good Job Hunting (forget New Jersey)!

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According to apost at Pharmalot, rumor has it that Pfizer will lay off a number of chemists at its main R&D facility in Groton, Connecticut as early as next Fall The rumor supposedly began at an R&D blog run by a former Pfizer employee (always a reliable source for inside information). 

M y colleague Ed Silverman who runs Pharmalot contacted Pfizer about the rumor and received this response “A leading R&D organization must evolve, continue to build on its strengths, capture competitive advantage wherever possible and be realistic about what it will take to return Pfizer to growth. What I can assure you is that if and when there are organizational changes, those decisions are never taken lightly. Our guiding principle is that colleagues hear about important Pfizer news from company leadership first and are treated with the utmost respect.” In other words, Pfizer will likely be laying off more employees in the very near future.

Hat tip to Ed!

Until next time…

Good Luck, Good Job Hunting and Happy 4^th of July!!!!!

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The Avandia debacle is still ravaging the employee ranks at GlaxoSmithKline especially at its Research Triangle Park, North Carolina and in Philadelphia locations. According to a post at Pharmalot, the UK-based drug manufacturer is cutting as many as 350 jobs (2.0% of its workforce) at both locations. This represents an almost 40% reduction in drug discovery and development activities that take place at both sites.

These cuts come after GSK closed a factory and drastically cut its sales force late last year. To make matters worse (particularly for those folks who lost their jobs) GSK purchased an early-stage drug discovery company called Sirtris Pharmaceuticals for about $720 million earlier this year. Clearly, company executives have more faith in external rather than internal drug discovery at GSK.

The saga continues……

Until next time

Good Luck and Good Job Hunting (forget North Carolina)!!!!!

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Minnesota-based Medtronic, Inc., one of the world’s largest medical devices companies, announced  that it was cutting about 1,100 jobs; 350 of which will be in Minnesota. This is the first layoff at the medical devices manufacturer in over 5 years. According to a press release, slightly over a third of the layoffs will come from the company’s local operations, which has about 8,000 employees. The overall effect of the reorganization will be relatively small—affecting roughly 3% of the company’s worldwide workforce of 39, 500.

Medtronic attributes the realignment (not restructuring according to company executives) to slumping sales of its spinal and cardiac devices. Accordingly, the company’s cardiac rhythm and neuroscience businesses along with local operations will bear the brunt of the job cuts.

It looks as though the entire life sciences sector is under assault. Belt yourself in—it’s going to be a rough ride for the foreseeable future!

Thanks to Ed at Pharmalot for the heads-up!

Until next time….

Good Luck and Good Job Hunting (are there any left?)!!!!!

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As I mentioned in previous posts, things are simply not going Merck’s way. Merck has been battered in the past several months by the Singular flap, precipitous drops in Vytorin and Zetia sales and, most recently, FDA’s rejection of its follow-up Cordaptive anti-cholesterol drug. This has left the drug maker with little choice but to cut an additional 1,200 jobs from its rapidly shrinking US sales force.

The cuts, announced yesterday, are in addition to a companywide reorganization that began in 2005 which resulted in the elimination of approximately 8,100 positions. As of last December, Merck had 59,800 employees worldwide—soon to be 58,600 give or take a few employees!

Until next time….

Good Luck and Good Job Hunting???????

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Eli Lilly & Co. announced today that it will eliminate 500 jobs at its manufacturing facility in Indianapolis, IN. The cuts will affect sites that manufacture active pharmaceutical ingredients for Lilly’s insulin products Humalog® and Humulin® and its osteoporosis medicine Forteo®.

Lilly is offering incentive packages for those employees who voluntarily leave the company. The company has already reduced its global headcount by twelve percent or about 5,500 people since 2004.

Times are tough and getting tougher each day in pharma land. Buckle up–its going to be a rough ride for jobseekers in the pharmaceutical and biotechnology industries.

Until next time….

Good Luck and Good Job Hunting (avoid Indianapolis, who wants to be a Hoosier anyway?)

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I happened upon a Sunday morning talk show yesterday where one of the guests was discussing strategies that employees ought to adopt to keep their jobs in a recessionary economy. For those of you who haven’t been paying attention, the US economy lost 63,000 jobs last month; another bit of evidence that we are sliding into an unavoidable recession. 

The talk show guest posited that only those employees who were able to quickly adapt to rapidly changing corporate/business environments would keep their jobs; the other less adaptable employees would find themselves jobless. Call me crazy, but his analysis sounded eerily similar to Darwin’s principle of natural selection or “survival of the fittest”–only those members of a population who were able to adapt (through mutations in Darwin’s case)  to changing environmental conditions will survive; the other less adaptable members will perish. Imagine that, using a recessionary economy to illustrate one of the fundamental principles of Darwin’s theory of evolution–how cool is that?

Here are some insights into how to keep your job during a recession when many companies are unstable and in flux. First, employees who work at financially-troubled companies must embrace the changes frequently instituted by management whether or not they agree with them. Invariably, there will be a cadre of employees who openly and publicly criticize the “new corporate policies”–these will likely be the employees who are demoted or “right-sized” out of the company.  In Darwinian terms, these employees are unable to adapt to change and they will either be eliminated or their standing in the population (company) will be diminished.  On the other hand, the employees who are able to embrace change will not lose their jobs and will likely be able to maintain or improve their standing in the population (company).  In other words, adaptable employees have a selective, competitive advantage over unadaptable ones which will allow them to survive and flourish in their new environment. Second, it is probably not wise during periods of corporate upheaval, for mid-level managers or employees to tout their past accomplishments or remind management about their worth to the company. In times of change, management embraces individuals with forward-looking ideas (to facilitate change) not those who are rooted in the past and are invested in antiquated corporate policies and practices. Again, only those employees who adapt will be able to survive and compete in their new corporate environment.  Finally, as a science educator, it is always exhilarating and exciting to find new ways to teach Darwin’s Theory (sic) of Evolution so that it makes sense to lay audiences. Maybe watching Sunday morning talk shows isn’t a waste of time after all!!!!

Until next time… 

Good Luck and Good Job Hunting (adapt)!!!!!!!!!

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Germany’s GPC Biotech announced another round of job cuts as it tries to regroup after its failure to win US approval of its experimental prostate cancer drug satraplatin.

The company said that this latest restructuring will sharpen its focus on oncology clinical development efforts and further reduce costs to extend its cash reserves to cover three years of operating expenses. The restructuring is mainly focused on GPC’s early-stage research activities in Munich and will result in 38 job losses. The remaining work force will be 14 in Munich and 49 in Princeton, New Jersey. These latest cuts come after an announcement in November that the firm was slashing its workforce by over 100.

A GPC Biotech spokesperson also announced that the company is discontinuing internal development of the 1D09C3 monoclonal antibody, which is in Phase I clinical trials for relapsed/refractory B-cell lymphomas. However, RGB-286638, a broad-spectrum cell cycle kinase inhibitor, is expected to enter the clinic within the next six months. 

Things are looking pretty dicey at GPC Biotech.

Until next time….

Good Luck and Good Job Hunting!!!!!!!!!

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Astra Zeneca and Sanofi-Aventis announced job cuts today that will take place in the UK and Germany.

AstraZeneca says it plans to cut more than 300 jobs at its research and development hub at Alderley Park near Wilmslow England, 60 more than unions had feared.

The company, one of the biggest employers in Cheshire, said last week that it was examining its global R&D structure, prompting trade unions to claim that 244 jobs were likely to go at Alderley Park - its largest site for research - which employs more than 3,500. The majority of those affected at Alderley Park work on R&D into respiratory conditions, while there will be a smaller number of job losses from the cardio-vascular team.

Sanofi Aventis plans to eliminate 380 sales and marketing jobs in Germany, one-fifth of the total, because of difficult market conditions, a company spokesperson said. Sanofi Aventis currently employs 1,900 sales and marketing personnel in Germany. The company has 10,000 employees in the country.

The cuts will be made through a voluntary departure plan and retirements, the spokesperson said, citing difficulties in obtaining reimbursements, competition from generic drugs, and falling prices as reasons for the cuts.

The spokesman declined to comment on German press reports which said Sanofi Aventis's sales in Germany fell 8 per cent last year.

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Ed Silverman who runs the  Pharmalot blog reported that Novartis is slated to cut about 1,200 jobs to save the company about $230 million a year.  According to the post at Pharmalot, Novartis will let 240 employees go at its US- based headquartersin Hanover, New Jersey and eliminate over 1,000 full time and contract sales representatives from its workforce.  Also reported was that Novartis is planning to create a biologics division within the company.  I find this extremely interesting because Novartis already has a strong footprint in the biologics biz  via its wholly-owned subsidiary Sandoz, which is one of the market leaders in the follow-on biologics aka biosimilar sector.

I guess having a biologics division is de rigueur these days if you are a big pharma company.  I am still wondering why it took so long for all of these high paid pharmaceutical executives to figure out that biotechnology was the next  big thing?  You would think that after 30 years, they would get the hint.  But then gain these are some of the same people who brought us Vioxx, Avandia, Exubera and ...go ahead ....pick your favorite.

Until next time....

Good Luck and Good Job Hunting!!!!!!!!!!!!!!! 

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Monster Worldwide, the company that runs the largest job board site Monster.com, quietly announced three weeks ago that is was laying off about 800 workers or approximately 15% of its workforce.

Monster Worldwide Inc. said mounting legal expenses associated with defending a growing U.S. government probe of its stock options grants practices were the reason for the job cuts.

The layoffs will mostly be in non-sales jobs in North America, Monster said.

The company also plans to streamline functions such as human resources and finance, Monster said.

It is not a harbinger of good things to come when the largest site on the web dedicated to helping individuals find employment downsizes its workforce to cut costs!

Until next time....

Good Luck and Good Job Hunting

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