ASTRAZENECA is cutting a further 7,300 jobs and expects earnings to fall 14-18 per cent this year as patents on key drugs expire and governments in Europe and the US squeeze prices.
Britain’s second-biggest drugmaker said yesterday the latest phase of cuts, equivalent to 12 per cent of the workforce, would deliver an extra $1.6bn (£1.02bn) in annual benefits by the end of 2014. It will cost $2.1bn to implement.
The drugmaker faces loss of exclusivity on many of its top-selling drugs over the next five years and has few obvious replacements in its pipeline.
The antipsychotic medicine Seroquel, its second-biggest drug, will lose exclusivity in the US in March and also goes off patent in European countries this year.
That will contribute to a tough year, with group sales expected to decline by a low double-digit percentage in 2012.
The company has already implemented two earlier rounds of cutbacks involving 21,600 job losses since 2007, which has reduced its worldwide headcount to 61,000.
AstraZeneca now expects recently launched products and the pipeline to contribute $2-4bn to sales by 2014, down from $3-5bn estimated a year ago and $4-6bn seen in 2010.
It now expects overall revenues in the period up to 2014 to be in the lower half of the previously forecast range of $28bn to $34bn a year. Sales were $33.6bn in 2011.
Despite the challenges, AstraZeneca is committed to returning cash to shareholders and plans to buy back $4.5bn in shares in 2012, more than analysts had expected. The 2011 dividend was raised by 10 per cent to $2.80 a share.
In the fourth quarter of 2011, earnings rose 16 per cent to $1.61 per share on flat sales of $8.6bn.
