Downsizing: Biotech Companies Are Catching Up to Big Pharma
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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.
- 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.
- Allergan (460). This represented a five percent reduction in the company’s workforce.
- 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.
- 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.
- 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...
Good Luck and Good Job Hunting ????
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American competitiveness in engineering, technology and science. Unfortunately, while American competitiveness and innovation in these areas continues to wane, little has been done (except talking) about it! 
According to an 
Things are just not going well for Natick, MA-based device manufacturer Boston Scientific. Yesterday, the company announced that it lost $1.1 billion in the fourth quarter this year. The losses mainly stem from the company’s $1.73 billion 
After announcing that it would 
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The past couple of weeks have been awful for employees at 
, 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..jpg)
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;.jpg)
Just when you thought that holding on to a job couldn’t get any worse, Pfizer .jpg)
Just when you thought things couldn’t get much worse for New Jersey, Merck and Pfizer 
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?.jpg)
After 
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,
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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. 
I received a call today from GDS International, a UK-based b2b publishing company, alerting me to its annual, event called the .jpg)
The
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.
The Belgian chemical manufacturer Solvay 
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. .jpg)
Losing a job is a BIG deal whether you were layed off, fired or right-sized out of it. Not only do you have to worry about health insurance, bills and paying rent or making a mortgage payment, you must also deal with a myriad of self esteem and emotional issues that frequently arise after losing a job. While there are many articles and books that describe how to functionally conduct a job search after being layed off, there are only a handful that discuss how to cope with the stress and negative emotions that frequently accompany job loss..jpg)
Pharmaceutical sales representatives, along with R&D scientists have been the largest casualties of recent downsizing that has been sweeping the life sciences industry. Increasing regulatory scrutiny, decreasing numbers of new drug approvals and an increasing reliance on e-based technologies to sell drugs have almost rendered the traditional pharma rep obsolete. 
Medtronics, the world's largest medical-device company, 
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. 
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..gif)
While I have never been layed off, I understand how awful and painful it must be. After all, unlike people who were fired for cause or otherwise, most people who are layed off are performing well but they simply became too expensive or expendable to remain with a company facing financial exigency..jpg)
Talk about a rough week. First, on Monday,.jpg)
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The ink hasn’t had time to try on the deal sheet and Pfizer already has announced what the impact of its acquisition of Wyeth will have on the combined company. Here’s what to expect: Pfizer will shed at least 19,000 jobs from it newly combined work force of 128,000 employees; it will slash its stock dividend by 50%; and it will take a $2.3 billion charge to settle a federal investigation over off label promotion of its former pain drug Bextra. .jpg)
I believe in free enterprise and that publicly-traded companies ought to be able to buy one another if a deal makes sense. In any other financial market, Pfizer’s impending acquisition of Wyeth would be a noteworthy event but not extraordinary. However, we are living in unprecedented and uncertain financial times and Pfizer’s possible purchase of Wyeth has serious implications for American taxpayers.
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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 
Long rumored, 
Did you know that the top ten pharmaceutical companies in the world spent close to $50 billion dollars last year on R&D? That sum could be used to purchase the entire US biotechnology industry except for the five largest companies—Genentech, Amgen, Gilead Genzyme and Celgene. Further, pharma’s R&D budget is about 4 times the R&D budget of all of the US biotechnology companies combined. According to a
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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 .jpg)
In a 
Pfizer announced today that it will .jpg)
Over the past few weeks, the blogosphere was rife with rumors and speculation that Pfizer would be laying off additional R&D personnel in December. However, it seems that the layoffs have been 
Pfizer may announce 
The Pharmalot blog reported today that .jpg)
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..gif)
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 .jpg)
The Pharmalot blog reported yesterday that .jpg)
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!
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It shouldn’t come as much of a surprise, but according to a recent survey of 3,000 job seekers conducted by the outplacement firm Challenger, Gray and Christmas the time it takes to find a job is growing longer. For example, the median time for job searches conducted by those winning positions grew from 3.6 months in the second quarter to 4.4 months in the third quarter of 2008. Also, it found that 13.4% of job seekers relocated to take new positions in the third quarter of 2008. While this is up from a first quarter figure of 8.9%, it is still lower than the percentage of job seekers (15%-16%) who relocated in 2006 and part of 2007. .jpg)
As expected, 
It was only a matter of time after 
Despite an increase in profits, .jpg)
On the heels of yesterday’s announcement that it wants to buy Genentech, Roche, in a surprise move, 
Yesterday Pfizer announced that it would layoff 275 employees
Pfizer is at it 
Siemens, the German conglomerate that manufactures everything from locomotives to medical imaging devices, officially announced on Tuesday that it will be sacking 4% of it workforce or 16,750 employees. Although the company didn’t specify where all of the cut would be taking place—it is a global workforce reduction—a company spokesperson did indicate that 1,500 administrative jobs in its healthcare division would be eliminated and most of those jobs are in the US. Many of these cuts will likely take place in the tri-state area (New York, New Jersey and Pennsylvania)—not welcome news for the already battered pharmaceutical and biotechnology industries in the region.
According to a
Siemens, the Germany engineering, electronic and healthcare company is planning to 
Generic manufacturer 
Merck announced last week that it will cut 1,200 sales jobs in the U.S. by the end of July. The company also confirmed a plan to eliminate a small natural products group in Spain and Rahway, NJ. Whereas the salespeople who lost their jobs were given notice by the company, the natural products researchers in Spain (and Rahway) learned of their imminent demise via a power point presentation given by a Merck executive (whose name has not been disclosed).
t 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.
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As I mentioned in previous posts, things are simply not going Merck’s way. Merck has been 
I want to thank my esteemed colleague, 
Astra Zeneca
Well, it had to happen sooner or later. 
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Rumor has it that Bristol-Myers Squibb will announce its long-awaited layoffs this week. The company announced last Spring that layoffs were necessary and that employees affected by the job cuts would be notified during the first week of December 2007. Most of the layoffs will likely occur at BMSs' New York headquarters. Job cuts are also anticipated in sales and at several manufacturing sites.
Not to be outdone by big pharma, Boston Scientific, the medical device manufacturer that specializes in metal and drug-coated stents (which have recently garnered their fair of negative publicity in cardiovascular circles) 
This should not come as a big surprise (especially to the Amgen employees who already know that they will be losing their jobs) but 
