Swiss pharmaceutical company Novartis has again drastically reduced its workforce in the United States to deal with the expiry of an important patent and its failure to get traction on other drugs, the firm said on Friday. After cutting 2,000 positions in late October, mainly in Switzerland and the US, the Basel-based company has again downsized its American operation.
The group plans to eliminate 1,630 positions resulting in the loss of a further 330 medical sales management posts in the US. The step is to take effect from the second quarter and is expected to save the group $450 million (351.3 million euros) annually from next year.
Novartis' action stems from losing the patent of its lead drug for hypertension, Diovan. This "blockbuster" was the best performer for the group reaching sales $1.4 billion in the third quarter. The US patent for Diovan, which ended in Europe at the end of last year, will expire in September making it vulnerable to competition from generics. These are, however, not the only setbacks for Novartis.
The group has faced difficulties with another hypertension drug, Rasilez (Tekturna in the US) and in December stopped the Phase III clinical study of a drug used in patients with diabetes, due to side effects. Two other drugs under development, the anticoagulant Elinogrel and Oral Calcitonin used for osteoporosis and arthritis, also failed to reach the Phase III clinical studies' stage and were removed from the company's portfolio. These setbacks led Novartis to collect special charges totalling $1.2 billion.
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