Swiss drug maker Novartis to cut almost 2,000 US jobs this year on patent expiry, failed trial
Drug maker Novartis will cut 1,960 jobs in the United States this year in anticipation of lower sales for two of its hypertension drugs, the Swiss company said Friday.
Basel-based pharmaceutical giant Novartis AG said the cuts will affect 1,630 sales positions in the field and 330 posts at its U.S. headquarters in New Jersey.
The restructuring was necessary because of the expiration of its patent for the best-selling hypertension drug Diovan and the failure of a clinical study into another hypertension drug, Tekturna, Novartis said.
“We recognize that the next two years will be challenging in the Pharmaceuticals Division and we are proactively making these changes to further focus our pipeline on the best opportunities and align our market position on our growth brands,” the head of Novartis’ pharmaceuticals division, David Epstein, said in a statement. “These are difficult but necessary decisions that will free up resources to invest in the future of our business which we view as well suited to bring new valuable therapies to patients and payors.”
In 2010 the company eliminated 1,400 U.S. sales jobs, followed by 900 U.S. development posts last October.
Novartis said the latest job cuts would save $450 million a year from 2013 after an initial charge of $160 million, to be booked in the first quarter of 2012.
Diovan contributed $1.43 billion to Novartis’ net pharmaceutical sales of $8.16 billion in the third quarter. Its patent expiry is likely to markedly increase competition from generic products.
Meanwhile, Novartis said a reassessment of the future sales potential of Tekturna, which is known as Rasilez outside of the U.S., will result in an exceptional charge of $900 million in the fourth quarter. The company said last month it had terminated a trial into the expanded use of Tekturna after it was found to cause increase complications in patients already taking other common hypertension drugs.
Two other experimental drugs will also be dropped, leading to one-off charges of $160 million in the fourth quarter, Novartis said.
In its statement, Novartis made no mention of a recent announcement that it was recalling several over-the-counter drugs in the United States following reports of a possible mix-up with powerful prescription pain medications at a Nebraska manufacturing plant.
Novartis shares closed 0.7 percent lower at 53.00 Swiss francs ($55.59) on the Zurich exchange Friday.
Savient Pharma Names David Veitch President Of Savient Europe – Quick Facts
Savient Pharmaceuticals, Inc. (SVNT) said it named David Veitch President of Savient Europe, effective January 16, 2012. Veitch will report directly to John Johnson, Chief Executive Officer and President of Savient. He will be responsible for establishing, building and leading Savient’s European regional organization to launch and drive the future growth of KRYSTEXXA.
Veitch has over 24 years of pharmaceutical industry experience.
Watson Pharmaceuticals Incorporated (WPI) EPS Estimates Cut by Goldman Sachs (GS)
Investment analysts at Goldman Sachs (NYSE: GS) lowered their EPS estimates on shares of Watson Pharmaceuticals Incorporated (NYSE: WPI) in a note issued to investors on Friday. They currently have a “buy” rating and a $78.00 price target on the company’s shares.
Separately, analysts at Jefferies Group (NYSE: JEF) reiterated a “hold” rating on shares of Watson Pharmaceuticals Incorporated in a research note to investors on Tuesday, December 20th. They now have a $70.00 price target on the stock. Analysts at Citigroup (NYSE: C) reiterated a “buy” rating on shares of Watson Pharmaceuticals Incorporated in a research note to investors on Tuesday, December 20th. They now have a $82.00 price target on the stock. Also, analysts at Canaccord Genuity reiterated a “buy” rating on shares of Watson Pharmaceuticals Incorporated in a research note to investors on Tuesday, December 20th.
Watson Pharmaceuticals, Inc. (Watson) is an integrated global pharmaceutical company engaged in the development, manufacturing, marketing, sale and distribution of generic and brand pharmaceutical products. It operates in three segments: Global Generics, Global Brands and Distribution. It operates in international markets, including Western Europe, Canada, Australasia, Asia, South America and South Africa with its commercial market being the United States of America. As of December 31, 2010, it marketed approximately 160 generic pharmaceutical product families and approximately 30 brand pharmaceutical product families in the United States, and distributed approximately 8,500 stock-keeping units (SKUs) through its Distribution Division. In January 2010, the Company acquired 64% of Eden Biopharm Group Limited (Eden). In May 2011, it acquired Specifar Pharmaceuticals S.A.
Shares of Watson Pharmaceuticals Incorporated traded up 0.23% during mid-day trading on Friday, hitting $62.19. Watson Pharmaceuticals Incorporated has a 52 week low of $51.39 and a 52 week high of $73.35. The stock’s 50-day moving average is $62.05 and its 200-day moving average is $65.82. The company has a market cap of $7.908 billion and a price-to-earnings ratio of 42.68.