Allergan slashes 1,500 jobs
pharmafile | July 22, 2014 | News story | Research and Development, Sales and Marketing | Allergan, Botox, Jobs, cuts, valiant
Allergan is to cut 1,500 jobs as part of a restructure which it believes will make pre-tax savings of around $475 million in 2015.
Wielding the axe on around 13% of its global headcount is necessary, Allergan believes, although it says “approximately 94% of all customer-facing personnel” will be unaffected.
R&D will be among the areas hit – although Allergan insists that all pharma research currently ‘in the clinic’ will continue, and any reductions in discovery programmes ‘will not impact approvals’ between now and 2019.
Savings are expected to come from efficiencies and reductions in spend across the commercial organisation, general and administrative functions and manufacturing as well as R&D. Meanwhile 250 posts which are currently vacant will be ‘eliminated’.
The point of it all is to focus resources on the ‘highest value opportunities’, Allegan goes on, while streamlining its organisational structure, simplifying processes, making the best use of its physical facilities and managing better the procurement of goods and services.
There will be a hefty price tag for all this retrenchment activity: Allergan currently puts the figure at between $375 million and $425 million, charges which will appear on the balance sheet in the third quarter of this year and should carry on to the middle of next year.
The lion’s share of this will be in staff severance payments, facility lease and other contract terminations, asset write-downs, the hiring of temporary staff to cover gaps and duplicate operating expenses.
The announcement came as the Botox manufacturer revealed second-quarter net income was up 18.3% year-on-year to $417.2 million.
The firm has been the target of several takeover bids from Valeant Pharmaceuticals International this year, the latest of which was to the tune of $54 billion.
However, the board has rejected each advance, saying Valeant ‘substantially undervalues’ Allergan.
Backing Valeant is Pershing Square Capital Management, which is run by William Ackman, who is also the largest shareholder in Allergan.
Adam Hill
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