Job cuts in the pharmaceuticals industry have surged in the first half of 2024, with large companies including Bristol Myers Squibb (BMS), Bayer and Pfizer seeing thousands of redundancies. <\/p>\n<\/p>\n
BMS began a wave of restructuring that will see 2200 jobs cut including 860 in Lawrenceville, US. The firm says the cuts will save $1.5 billion (1.2 billion) in annual costs by the end of 2025. In March, Evonik said it had completed the first phase of a reorganization with a target of cutting 400 million (340 million) annually by the end of 2026, including 2000 job cuts worldwide, of which 1500 will be in Germany. <\/p>\n
Meanwhile, in the first three months of this year, Bayer cut over 1500 positions mostly from management, as part of a three year rejuvenation programme aimed at reducing bureaucracy in the face of challenges from patent expiries and litigation in the US arising from its takeover of Monsanto. <\/p>\n
In the US, Japanese drugmaker Takeda is shutting a research centre in San Diego and cutting jobs at sites in Massachusetts this year. It also closed a plant for viral gene therapy in Austria, with the loss of almost 200 jobs. <\/p>\n
A lot of these firms are facing some patent losses and some areas where they need to restructure and optimise, says Damien Conover, head of health equity strategy at Morningstar, a market analyst. I wouldnt expect too much pullback from oncology or immunology. Those are areas of pretty good focus, he adds. You might see pullback in areas like respiratory, or womens health. <\/p>\n
In October 2023, Pfizer began a multi-year drive to save around $4 billion by the end of 2024. This included cutting around 500 staff at its site in Sandwich, UK, with some parts of the development and manufacturing facility since acquired by Asymchem Laboratories. In a regulatory filing in May, the company outlined plans to reduce costs by an additional $1.5 billion by the end of 2027. <\/p>\n
Pfizer had ramped up development and manufacture of Covid-19 vaccines during the pandemic, which drove a rise in profits (measured as net income) from $16 billion in 2019 to over $31 billion in 2022. Demand for its vaccine and antiviral combination Paxlovid (nirmatrelvir, ritonavir) have since fallen substantially, and the company reported net income of just $2 billion in 2023. The company also paid $43 billion for Seagen a leader in antibody-drug conjugates in December 2023, triggering some job losses and halting construction of a new Seagen plant in Switzerland. <\/p>\n
Biotechs look a lot like big pharma now; theyre facing a lot more patent losses than in the previous decade <\/p>\n
Pfizer is now in a cost-cutting mode after investing heavily, says Conover. The magnitude of cuts was higher than what I was expecting, and it looks like its on track to achieve most of those cuts, which will really help profitability. <\/p>\n
The big companies are at the mercy of the markets, and the bean counters are looking avidly at where to save costs, says Chris Coe, head of life sciences at executive recruitment firm Kingsley Gate. But overall the demand for talent has gone up, he asserts. It is going to be tough for people being laid off, given the large numbers happening at once, he acknowledges, but it will also benefit medium sized businesses that are looking to grow. <\/p>\n
In the biotechnology sector, Genentech is cutting 436 jobs in San Francisco, US. Illumina also instigated layoffs as part of $100 million in cost cutting, following its failed attempt to acquire cancer test maker Grail. <\/p>\n
News website Fierce Biotech has been tracking industry layoffs since 2022, recording 187 total layoffs among biotech companies last year, up from 119 in 2022. Companies announcing recent job cuts include Exscientia, Biomarin, Emergent BioSolutions, Benevolent, Amylyx and CureVac. <\/p>\n
Small companies can have very different staffing requirements at different stages of product development, and can be strongly affected by individual project outcomes. Hence such layoffs have some uniqueness, but there are also some general trends, says Conover. These companies go through cycles where theyre losing exclusivity on certain products, and they need to pivot resources from those to new products. <\/p>\n
He adds, if they lose exclusivity and dont have a next wave of innovation, then you will see some cost cutting happen. <\/p>\n
There has also been a shift due to the maturity of the biopharma sector. Biotechs look a lot like big pharma now, because theyre facing a lot more patent losses than they had in the previous decade, says Conover. <\/p>\n
While there was abundant financing during the pandemic for pharma and biotech, there was a precipitous drop thereafter. The financing windows are better than they were a year ago, but not as good as during Covid, says Conover. <\/p>\n
Coe notes that fewer companies are floating on stock exchanges, for example. We havent seen the access to capital really tick up, he explains. The venture capitalists had been reasonably bullish about the middle of this year, but it has been slow to improve. <\/p>\n
There has also been a wave of acquisitions, which can trigger some layoffs. Examples include big companies buying into radiopharmaceuticals and antibody-drug conjugates, but also Merck & Co buying immunology specialist Prometheus; AbbVie buying Cerevel, with its neuroscience pipeline; and Roche acquiring Telavant, targeting inflammatory and autoimmune conditions. Conover predicts that acquisitions will subside somewhat, but adds that he would expect to see more acquisitions in the range of $15 billion. <\/p>\n
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Visit link: Job cuts in the pharmaceuticals industry have surged in the first half of 2024, with large companies including Bristol Myers Squibb (BMS), Bayer and Pfizer seeing thousands of redundancies. BMS began a wave of restructuring that will see 2200 jobs cut including 860 in Lawrenceville, US. The firm says the cuts will save $1.5 billion (1.2 billion) in annual costs by the end of 2025 Continue reading
\nJob cuts sweeping across pharmaceuticals | Business - Chemistry World<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"