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Novartis to Restructure, Cut 1,960 U.S. Jobs

Pills (USA.gov)

(USA.gov)

The Swiss company Novartis Pharmaceuticals said on Friday it plans to reorganize its General Medicines division in the U.S. resulting in a loss of 1,960 jobs. The company said it expects the job cuts to take place in the second quarter of 2012.

Novartis plans to reduce its General Medicines field workforce by 1,630 jobs and its headquarters staff by 330 positions. The reductions, says Novartis, will enable the company to concentrate instead on specialty businesses. “These are difficult but necessary decisions that will free up resources to invest in the future of our business,” says David Epstein, Division Head of Novartis Pharmaceuticals.

The company attributed the structuring to the expiration of patents on its Diovan (valsartan) hypertension drug expected in September 2012. Also contributing to the decision is the anticipated sharp reduction in sales from its Rasilez/Tekturna drug for hypertension in patients with type 2 diabetes and kidney impairment. In December, Novartis stopped a phase 3 clinical trial of the drug when results showed no added benefits from the drug compared to general hypertension compounds, as well as unanticipated side effects and increased incidences of stroke and renal complications.

Novartis anticipates taking a one-time charge of $160 million in the first quarter of 2012 for the restructuring. Cancellation of the Rasilez/Tekturna clinical trial is also expected to lead to a $900 million charge, with $800 million of that amount in non-cash factors including impairments to intangible and manufacturing assets, and excess inventory together with trial winding-down and other exit costs. The company expects full-year savings of $450 million by 2013 as a result of the restructuring.

Read more: Novartis to Cut Jobs in U.S., Switzerland; Add Jobs in Asia

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