AstraZeneca to cut 7,300 more jobs

Drugmaker AstraZeneca P.L.C. said Thursday that it would cut 7,300 more jobs worldwide because of declining fourth-quarter profit and 2012 revenue prospects.

The company, based in London, plans to eliminate 12 percent of its workforce. There could be several hundred jobs lost in Wilmington and Newark, Del., a spokesman said.

Following up on a March 2010 decision to curtail neuroscience research, the company will close its Montreal research facility and slice that work from its largest site in Sodertalje, Sweden, with a net effect of an estimated 2,200 job cuts.

Beyond that, officials would not specify how many cuts will occur at other facilities. The cuts come from operations (estimated 1,350) and sales and administration (3,750).

In a conference call with reporters, chief executive officer David Brennan said there would not be the same sort of big changes to R&D in Delaware, in part because previous cuts hit those facilities.

"Wilmington continues to be very important to us, especially in clinical development, and we expect it to be for the foreseeable future," Brennan said.

Monday's cuts are the third set of layoffs since 2007, and the three-part total amounts to 28,900. The two previous rounds of layoffs involved 12,600 and 9,000 employees, respectively.

Brennan indicated the company has 58,000 to 60,000 employees now.

In trying for greater cost efficiency, the company is reducing the regional management groups from five to three - North America, Europe, and Asia/Pacific.

Tony Zook, the executive vice president of global commercialization, said the Wilmington office would handle the North American regional chores, adding Canada and Latin America. The Wilmington office had cuts late in 2011. This shift will not greatly change the workforce in Wilmington, Zook said.

Officials predicted the cost for severance and closing facilities would be $2.1 billion, but they said they expected $1.6 billion in annual savings by the end of 2014.

AstraZeneca's 2011 full-year profit increased from $8 billion to $10 billion over 2010, but the 2011 fourth-quarter profit decreased from $1.6 billion to $1.5 billion compared with the same period last year.

The full-year revenue for 2011 was $33.6 billion, but the 1 percent increase over 2010 was helped by currency-exchange rates.

Brennan said that he expected "low, double-digit declines in revenue" for 2012.

Like other drug company leaders, Brennan attributed the struggles to competition from generic drugs brought on by the expiration of patent exclusivity for high-profit branded drugs, no immediate replacements, and insurance programs (private and public) reducing reimbursements.

Two versions of the antipsychotic drug Seroquel had $5.8 billion in sales in 2011, but there is no sequel in the pipeline, which is why with the current cuts AstraZeneca will drop from "several hundred" neuroscience researchers to 40 to 50 and have them work in Boston and Cambridge, England.

Martin Mackay, president of research and development, said this group would form a new "virtual" neuroscience Innovative Medicines unit, hoping to combine internal knowledge with greater exploration of external research being done in academia or smaller corporations. Those potential partnerships - or "bolt-ons" - might yield more success.

The company has seven drugs that had at least $1 billion in sales, and it hopes that Brilinta (arterial thrombosis) or Komboglyze (diabetes) will develop into in profitable medicines. The company will still invest in research, but it might do it in different ways, such as adding to the 50 external partners that it has now for such research.