AstraZeneca reveals more job losses

By Press Association, 6 February 2014 12.00pm. Updated: 7 February 2014 7:43am.

Pharmaceutical giant AstraZeneca revealed more job losses and warned over a further hit to its bottom line as competition from cheaper rivals continues to batter drug sales.

Another 550 jobs are being axed globally on top of more than 5,000 cuts already announced under a major cost-cutting programme as it looks to ramp up annual savings to 1.1 billion US dollars (£675 million).

It said a number of UK staff in IT teams across its Macclesfield and Alderley Park sites in the north west would be affected as part of the additional jobs cull, which has already been communicated to workers internally.

The group is slashing costs to reinvest in new drugs to offset the impact of competition as patents on many of its best-sellers come to an end - a factor that drove a 6% drop in sales last year to 25.7 billion dollars (£15.8 billion) and more than halved operating profits to 3.7 billion dollars (£2.3 billion) at constant exchange rates.

Astra also gave little cheer over the current year as it trimmed earnings and sales guidance ahead of competition in the United States for another of its top-sellers - popular heartburn and ulcer drug Nexium - from May.

It now expects 2014 sales to suffer falls in the low to mid-single digits, excluding currency movements, with earnings also likely to be impacted. Shares fell 3%.

The figures come in stark contrast to a return to form from rival GlaxoSmithKline yesterday, which reported rising revenues for the first time in two years and hailed the best year for R&D in its history.

Pascal Soriot, chief executive of AstraZeneca, said: "As expected, our financial performance for 2013 reflects the ongoing impact from the loss of exclusivity for several key brands.

"In the near term these headwinds will remain challenging, however I am confident that we can return to growth faster than anticipated and expect our 2017 revenues will be broadly in line with 2013."

The group's latest job cuts will see up to 400 IT roles go amid an overhaul of the division, largely affecting teams in the UK, Sweden and US.

A further 168 staff are losing their jobs after its recent decision to pull R&D activities in Bangalore, India, later this year, while it added it was quitting branded generics in some emerging market regions.

The UK impact will come as a further blow to its Alderley site in Cheshire, which was rocked last year when Astra announced that all R&D would cease at the base under plans to shift the work to a centre in Cambridge.

This is already leading to the loss or relocation of more than 2,000 jobs at Alderley.

Astra employed around 6,800 staff in the UK before its major three-year job loss programme was announced last March, which is reducing its overall global workforce by more than a 10th.

The group's full-year figures were dragged down further by a dismal final three months of 2013, when it slumped to a 591 million US dollar (£363 million) operating loss after a 1.8 billion US dollar (£1.1 billion) impairment due to disappointing sales of its diabetes drug Bydureon

Astra is hoping its pipeline of new drugs will drive a turnaround, with the number of new medicines in late-stage development nearly doubling over the past year.