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AZ to slash more European jobs and ramp-up China investment

By Gareth Macdonald , 24-Nov-2008
Last updated on 24-Nov-2008 at 13:56 GMT

 

AstraZeneca is to cut 1,400 jobs and close more manufacturing facilities by 2013, as it attempts to slim down in preparation for impending generic competition for some of its cornerstone drugs.

The move, which is in addition to the 7,600 jobs the firm will eliminate over the next two years under its 2007 restructuring plan, will see it close facilities in Porrino, Spain, Destelbergen, Belgium and Umeaa, Sweden.

Jobs at the company’s plants in Macclesfield in the UK and Sodertaije, Sweden will also be affected although further details are not being released at present.

The news comes just days after the drugmaker won a case temporarily blocking a generic version of its asthma drug Plumicort Respules made by Israeli firm Teva Pharmaceutical Industries.

AstraZeneca, which has halted sales of a generic version of Plumicort that it sells with Par Pharmaceuticals, said that the final outcome of the patent trial, due to begin again tomorrow, is likely to impact on its earnings for the year.

Observers had mixed feelings about the patent battle. Natixis’ Philippe Lanone, told Bloomberg that although AstraZeneca had reacted quickly there already may be some damage from early shipments of Teva’s generic version of Plumicort. The UK firm’s share price fell 1.7 per cent, or 42 pence, in trading on the London Stock Exchange.

Regardless of the outcome of the Plumicort battle, AstraZeneca’s announcement of new job cuts is a further indication of the difficulties being faced by big pharma in the changing global market.

While planned cuts by other drug majors such as Pfizer, Merck & Co, Schering Plough, Wyeth and GSK have been on the table for several years, the headlines in recent months have been dominated by news of additional restructuring moves. Most recently Merck CEO Richard Clark said that the company must lose a further 7,200 jobs to survive.

Astra looks East

AstraZeneca also fell in line with another trend sweeping big pharma, announcing plans for further investment in its operations in South East Asia. The firm plans to increase its investment in its manufacturing facility in Wuxi, China.

The additional funds, details of which have not yet been released, is designed to expand the plants drug formulation capabilities and establish it as a packaging hub for its all of its manufacturing facilities in the region.

Commenting on the plan, AstraZeneca executive vice president David Smith said that: “It moves the supply process closer to the customer, responding to their requirements and improving the security of the product wherever it is bought.”

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