ASTRAZENECA’S new chief executive announced another 2,300 job cuts in sales and administration yesterday as he detailed his vision for turning round the struggling drugmaker and returning it to growth.
The latest cutbacks mean the group will shed around a tenth of its workforce, or 5,050 jobs, by 2016 as expiring drug patents shrink sales and it faces generic competition on several top-selling medicines.
The restructuring will result in one-time costs of $2.3bn (£1.5bn), but the firm said it should yield benefits of $800m a year by 2016.
Pascal Soriot, appointed from Roche last autumn, said he had no quick fix for the company and ruled out the idea of diversifying away from prescription drugs, as several rivals have done.
Instead, Soriot plans to invest in scientific research to replenish a sparse new drug pipeline.
AstraZeneca believes it can double the number of drugs in late-stage development by 2016 and by 2018 it expects revenue to “significantly exceed” the current market consensus of $21.5bn.
“It is a serious mountain to climb,” said Navid Malik, an analyst at Cenkos Securities. “It took GlaxoSmithKline 10 years and two patent cliffs before it could finally could say it would grow again this year.”
Soriot’s upbeat outlook helped lift the shares 3.1 per cent to 3,133p.