Posted on 12/17/2009 3:28:59 AM PST by Born Conservative
Sanofi Pasteur is eliminating regional jobs as its corporate parent pursues cost- cutting moves.
Sanofi, a vaccine maker in Swiftwater, Monroe County, that employs 2,200 people in the region, declined to disclose how many people will be affected. The layoffs start later this month and will continue for two years, spokeswoman Ellyn Schindler said.
"For some people who are likely to be impacted, they are trying to find other positions in the company," she said.
The layoffs occur as Sanofi-Aventis, the French pharmaceutical giant and parent of the local company, slashes expenses ahead of the expiration of patent protection on some of its biggest products.
"You're looking at a company that's facing pretty strong headwinds and they are adapting by going to a leaner structure," said Damien Conover, an analyst who follows Sanofi for Morningstar, a financial research firm based in Chicago.
In June, Sanofi-Aventis Chief Executive Officer Chris Viehbacher said the company would close eight of its 27 research sites worldwide, make work force reductions and seek more partnerships with outside labs to limit expenses.
The goal is to cut $3 billion in annual expenses by 2013, Mr. Conover said.
"The best way for them to get there is by cutting jobs," he said.
Earlier this month, Sanofi-Aventis laid off 750 members of its U.S. sales force. The cuts at the Swiftwater plant will affect marketing and sales staff, research and development workers and support personnel in purchasing, clerical and administrative functions, Ms. Schindler said.
Manufacturing employment at the plant will remain stable, she said, and a company statement says the layoffs are "intended to improve our efficiency and competitiveness in the years ahead."
In October, Sanofi-Aventis reported $10.7 billion in net third-quarter sales, including $1.5 billion in its vaccine division, and gross profit of $8.3 billion.
The Swiftwater plant, which makes vaccines for seasonal flu and other maladies, received $396 million in orders from the federal government this year for 75.3 million doses of H1N1 vaccine. The company on Tuesday recalled 800,000 units of "swine flu" vaccines for children that lost their potency, including 15,000 doses that were distributed in Pennsylvania.
Despite the company's strong performance in its thriving vaccine division, Sanofi faces a changing financial picture and more competition for medications it developed.
"It's losing patent exclusivity on several top-of-the-line products," Mr. Conover said.
The patent on Sanofi's Taxotere, a leading chemotherapy drug that generates sales of $3 billion annually, expires in 2010. In 2011, patents expire on two products that Sanofi manufactures in a partnership with Bristol-Myers Squibb: Plavix, a blood thinner with annual sales of $8 billion, and Aproval, a blood pressure medication that generated $2.8 billion in 2008 revenue.
More hope and change. My guess is that "top economic experts" will be shocked by these "unexpected" job losses.
Sounds like more companies are inspired by Obama’s greatness and compassion to give more jobs to the little guys. /s
Actually, these layoffs are good business planning and logical actions to be taken when major income patents are coming to expiration.
The competition is waiting to cut the price when they can manufacture the products your company spent a tremendous amount of money and time to develop the market for products that did not exist before the patent was granted.
As a businessman who holds patents, I know exactly what will happen when my patents expire and would plan the same.
The company is simply using common sense to plan for a large reduction in the profits generated by the patents that will expire...nothing else.
True enough, but the patent term is there for the company to amortize it's research and development costs. In general, that money is clawed back many times over. After the patent expires, normal market forces set in and there is a level playing field.
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