The Trump Effect? Macy’s to Shed 10,000 Jobs and Close Stores

Posted in BioBusiness, BioJobBuzz

Over the past few weeks, President-elect Donald Trump has taken much credit for saving several hundred US manufacturing jobs in Indiana. Also, he has excoriated car marker executives ranging from General Motors to Ford to Toyota for planning to build manufacturing facilities in Mexico. While it is not clear how many jobs Trump actually saved or whether his twitter rants prevented car manufacturers from setting up production plants in Mexico, it is clear that he cannot or will not save large numbers of American jobs in the retail/service sectors. To that point, Macy’s, last week, announced that it was shedding 10,000 jobs and closing 100 stores to cut costs to improve its bottom line.

You may ask why saving a few hundred air conditioning jobs at taxpayer expense more important than saving 10,000 American retail jobs? As you may recall, in the summer of 2015 Macy’s CEO Terry Lundgren  said that he would stop selling Donald Trump’s clothing line in all of its stores.  Lundgren decided to take this action because then candidate Trump said many Mexican immigrants were rapists or murderers. Shortly after Lundgren announced his decision, Trump called on his supporters to boycott Macy stores.

While it is unlikely that the Trump boycott was responsible for Macy’s decline (all department stores are are getting hammered by online retailers), I do not expect Trump to help Macy’s (like he helped Carrier) save any of the 10,000 jobs that will be lost.  This is because Trump is a vindictive and hateful man who will not help anyone unless they shower him with adulation or do as they are told. Further, he likely considers Terry Lundgren a “loser’ because his business is failing. And, if Donald was in charge,  Macy’s would be a HUGE and GREAT success. Put simply, Macy’s got what it deserves for dropping Trump’s clothing line and not reinstating it after Trump was elected President. And, as for Lundgren, he said

“We made our decision about a year and a half ago, and stand by our decision,”

It’s going to be a rocky ride for the next 4 years.  So buckle in and hold on for your life!

Until next time…..

Good Luck and Good Job Hunting!!!!!!!!!!

Here We Go Again: AstraZeneca to Cut 1,600 Jobs

Posted in BioBusiness

Just when many pharmaceutical employees’ anxiety about  job security was beginning to wane and things appeared to returning to “normal”, yesterday AstraZeneca (AZ) announced that it was slashing another 1,600 jobs.  While this was not unexpected, these new cuts add to the massive number of pharmaceutical employees who have lost their jobs over the past five years.

According to a press release, the cuts will help AZ to save roughly $190 million per year through 2016.  Most of the lost jobs will come from restructuring of AZ’s R& D operations in the UK, Sweden and the US.  To that end, all R&D activity will stop at AZ’s Alderley Park facility in Northwest England, the former hub of the company’s R&D activities.  Az’s MedImmune subsidiary in Gaithersburg, MD will be the main center for biotech drug R&D while AZ’s research center in MoeIndal Sweden will focus on small molecule discovery and development.

AZ’s new CEO Pascal Soriot said the reorganization and restructuring were necessary to better focus the company’s R&D efforts in the key therapy areas that include cancer, cardiovascular and metabolic disorders and respiratory and inflammatory diseases. The company will reduce its efforts in the areas of neuroscience and antiinfectives.

Interestingly, many of the job cuts were made so that the company can build a new $500 million all purpose facility in Cambridge, England to leverage the R&D and clinical talent in that part of Britain.  The new facility is expected to be built by 2016.  Looking on the bright side, many of the employees who just lost their jobs, can find new ones three years from now!

AstraZeneca has already reduced its global workforce by around 10,000 as it has struggled to cope with generic competition and disappointing progress in finding new drugs. It now employs a total of 51,700 around the world.

Don’t be surprised if other big pharma companies announce new job cuts in 2013.

Until next time…

Good Luck and Good Job Hunting!!!!!

Recession….What Recession? CEO Pay Continues to Skyrocket

Posted in BioBusiness

Massive numbers of public and private employees have lost their jobs in the past five years.USunemployment still hovers around 8.0% but yet corporate profits have been hitting historical highs for the past two years. And, not surprisingly, CEOs are milking those profits for as much as they can get. To be fair, some public companies have made concerted efforts to reduce CEO compensation packages to control costs but in general most have not! In fact, in many cases CEO salaries are rising as employee salaries at their companies remain flat.

A recent list compiled by Equilar, an executive compensation firm, shows the 200 most highly paid CEOs at US public companies in 2011. Compensation includes base salary, cash bonuses, perks and other forms of cash, and stock and stock options. The top 10 executives in 2011 who received the highest compensation packages includes:

  1. Timothy D. Cook, Apple ($387 million: NA)
  2. David Simon, Simon Property Group ($137 million; +459%)
  3. LawrenceJ Ellison ($77.6 million; +11%)
  4. Leslie Moonves, CBS ($68.4 million; +20%)
  5. Ron Johnson, J.C. Penney ($53.3 million; NA)
  6. David M. Zaslav , Discovery Communications, $52.4 million; +23%)
  7. Sanjay K. Jha , Motorola Mobility ($47.2 million; +262%)
  8. Michael S. Jeffries, Abercrombie & Fitch ($46.6 million; +107%)
  9. Phillipe Dauman, Viacom ($43.1 million; -49%)
  10. David M. Cole, Honeywell Int’l ($35.3 million; 138%)

And the top 10 biggest winners (greatest annual change in compensation from 2010-11) are:

  1. Rodney C. Sacks, Monster Beverage (+1601%; $11.6 million)
  2. Gregory W. Cappelli, Apollo Group (+1414%; $25.1 million)
  3. Ian M. Cumming, Leucadia National (+555%; $29.3 million)
  4. Robert L. Antin, VCA Antech (+526%; $12.1 million)
  5. David Simon, Simon Property Group (+459%; $137 million)
  6. Jane Elfers ,Children’s Place Retail Store (+414%;$11.1 million)*
  7. Brian D. Jellison, Roper Industries, (+306%;$14.9 million)
  8. John P. Daane, Altera (+278%: $29.6 million)
  9. Sanjay K. Jha , Motorola Mobility (+262%; $47.2 million)
  10. Clarence P. Cazalot, Jr., Marathon Oil (+239%; $29.9 million)

Remember these are the compensation packages of CEOs of publicly traded companies. The packages of many privately held companies are likely to even higher!

Is this any way to run a recession??????

Until next time…

Good Luck and Good Job Hunting!!!!!!

Trouble in Big Pharma Land: Lilly Freezes Employee Salaries

Posted in BioEducation

The Pharmalot blog reported today that Eli Lilly & Co one of the more progressive big pharma companies to experiment with crowdsourcing and social media to generate new R&D opportunities today announced that it most company employees and executives will not receive base pay increases this year. The company did not announce a freeze in bonuses, however.

In a sign of solidarity with the 99 %, John Lechleiter, PhD Lilly’s outspoken and sometimes controversial CEO, requested that he not receive an increase to his $1.5 million annual salary and incentives. Interesting, as Ed Silverman cogently points out in the Pharmalot post, Lechleiter’s bonus target is 140% of his base salary which put his total compensation for the upcoming year at around $16.4 million!

Last week, the company disclosed that it missed analyst’s stock price estimates and its leading product Zyprexa (antipsychotic) yielded lower than expected sales revenues because of generic competition. Zyprexa sales dropped 44 percent in the fourth-quarter to $749.6 million.

Don’t be surprised if layoffs are next. It may be time for Lilly employees to dust off those CVs and resumes.

Until next time…

 

Are US Immigration Laws Really Hurting Life Science Innovation?

Posted in BioBusiness

A report in Bloomberg News today suggested that Eli Lilly & Co. Chief Executive Officer John Lechleiter, PhD told a technology conference today that unfavorable US permanent resident (green card) laws are to blame for declining US innovation in the life sciences. With this in mind, Lechleiter plans on calling for US immigration officials to issue more green cards and adopt a shorter and simpler process for highly skilled foreign nationals to gain permanent residence in the US. According to Dr. Lechleiter, one of only a handful of big pharma CEO who is also a PhD-trained scientist, current green card regulations are so-called job killers and force many talented foreign nationals to return to their native countries to work with firms that directly compete with American life sciences companies. Unlike most of his peers, Lechleiter has been very outspoken about the lack of US life sciences innovation.

While Lechleiter comments may have been appropriate five or more years ago, they are no longer germane to America’s waning innovation in the life sciences. There is little doubt that many bright and talented foreign nationals were denied permanent residency during the Bush era (2000 to 2008) because of stringent immigration policies and limits on the numbers of green cards allotted for persons from certain parts of the world; mainly China, India and the Middle East. This, in turn, forced many life scientists—many of whom desperately wanted permanent residency in the US—to return to their home countries to look for work and gainful employment.

As Lechleiter rightly asserts, these scientists found work with companies that began to directly compete with US life sciences. This phenomenon, coupled with the rapid assent of the middle class in many of these nations, made it possible to begin to conduct Western style research at a much lower costs in these countries. To that end, by 2007, most big pharma companies—many of whom had dwindling pipelines and monstrous overhead costs—realized that it would be more cost effective to outsource or move R&D to countries with emerging pharmaceutical and biotechnology markets and a well trained R&D workforce. And, for the past four years downsizing and outsourcing of R&D are exactly what have been taking place at many American big pharma and biotechnology companies.

In my opinion, the larger question that must be addressed, as far as US innovation in the life sciences is concerned is: why are so few Americans willing to pursue scientific careers? To wit, the main reason why so many foreign life scientists were educated and trained in the US over the past 20 years was because there weren’t enough American students to fill the incoming roster at most American graduate training programs. Put simply, America’s growing lack of innovation in the life sciences over the past decade can be directly attributed to far fewer Americans pursuing scientific careers and an increased reliance on foreign nationals—who were unable to stay in the US—to innovate! While changing US immigration laws may allow some foreign nationals to more easily remain in the US, there simply aren’t enough life sciences jobs left in the US to make it worth their while! In fact, the likelihood of them finding life sciences jobs in their home countries is now greater than it is in the US. In my opinion, the only way to restore American innovation in the life sciences is to convince American students that pursuing scientific careers is worthwhile and that the requisite training for industry jobs is available to them.

Interestingly, after leading with changes to US immigration laws, Lechleiter also suggested that America’s innovation problem could be solved by lowering US corporate tax rates and American companies should not be forced to pay taxes on oversea earnings. Also, he asserted that the US Food and Drug Administration (FDA) should stop putting off decisions or erring on the side of avoiding risk when considering new drug applications. 

This begs the questions, how do lower taxes, no overseas taxes and expedited drug approvals help to spur American innovation when most life sciences R&D is conducted outside of the US?

Until next time…

Good Luck and Good Innovating!!!!!!!!

 

Bayer CEO: "Make Me An Offer!"

Posted in BioBusiness

Bloomberg news today reported that Bayer AG’s Chief Executive Officer Marijn Dekkers said that he would consider a “merger of equals” to bolster the company’s sagging healthcare division. The division, a minor revenue source for Bayer AG, posted $25.1 billion in sales last year.

While Dekkers did not name the companies that he considers to be Bayer’s “equals”, convention wisdom suggests the list is likely to include Eli Lilly & Co, Bristol Myers Squibb (BMS) and Amgen, one of the last remaining, large, independent biotechnology companies. Lilly and BMS both  had  sales revenue similar to Bayer’s last year whereas Amgen had lower sales of $15.1 billion. 

The reasons for a potential merger are not entirely clear. However, Bayer Healthcare is waiting to hear about regulatory approval of its new anticoagulant Xarelto medicine for irregular heartbeat patients who face the risk of a stroke. Analysts predict that Xarelto may exceed $2.5 billion in global sales. Approval of Xarelto will change Bayer’s valuation and consequently, don’t expect merger talks to begin until after FDA renders its decision on the drug.

Meanwhile, Bayer’s top-selling multiple sclerosis (MS) treatment betaseron faces competition from a similar Novartis drug called Extavia, and from its new oral MS medication Gilenya. Sales of betaseron fell 5 percent in the first quarter. Moreover, sales of Bayer’s birth-control pill Yaz dropped 18 percent after Teva Pharmaceutical Industries Ltd. introduced a generic version of the medicine.

Lilly, BMS and Amgen all face significant challenges in the future and both BMS and Amgen have been repeatedly mentioned as takeover targets. However, from a historical perspective mergers of mediocre or struggling companies rarely yield stronger, more financially robust ones! But, what do I know, I am just a scientist!

Stayed tuned for more updates.

Until next time…

Good Luck and Good Job Hunting!!!!!!!

 

Decline in High School Student Participation at Science Fairs: The Obama Administration Responds!

Posted in BioEducation

The recent article published in the NY Times about the decline of high school student participation in science fairs resulted in many letters to the editor. Many of them were from concerned citizens and a few were from university researchers decrying the lack of government funding for research and the funding of sports over science programs. Another railed against the Bush’s Administration’s poorly crafted and ill-advised No Child Left Behind Act. However, there was one letter that surprised me. It was written by John P. Holdren, President Obama’s science and technology adviser (see below)

To the Editor:

Your article points to deep budget challenges that many school districts are facing and problems with the Bush administration’s No Child Left Behind law.

But it does not mention much of the Obama administration’s extraordinary agenda for improving science, technology, engineering and mathematics (STEM) education in this country: for example, the commitment to prepare 100,000 new math and science teachers over the next 10 years, the $4 billion Race to the Top program’s support for innovation in teaching these important subjects, and the administration’s blueprint for updating the Elementary and Secondary Education Act this year.

Recognizing that government alone cannot be the answer, moreover, the president has also called upon the business community, foundations, professional societies and others to do more. Already, the president’s “Educate to Innovate” campaign has attracted more than $700 million in nongovernmental financial and in-kind support for science and math programs.

And more than 100 chief executives have responded to the president’s “all hands on deck” call to action by launching “Change the Equation,” an unprecedented program to scale up effective models for improving STEM education.

John P. Holdren
Washington, Feb. 7, 2011

The writer is President Obama’s science and technology adviser.

What surprised me about the letter is that it took an article critical of the Obama Administration’s commitment to science education to provide the American public (at least part of it) with some insight into the government’s recognition of the problem and steps that it is taking to help to correct it. Perhaps the Obama administration needs to be a bit more proactive and publicly-vocal about its plans to improve American STEM education. This would go a long way to assuage some of the concerns about America’s waning global competitiveness in science and technology.

Like Dr. Holdren, I believe that government alone cannot be the answer and American corporations must get actively involved by providing ideas on how to improve American science education and the financial support to implement them. While the CEO-endorsed program “Change the Equation” sounds great on paper, it is time for those CEOs to actually step up and do something about the problem. Many of these same CEOs have been complaining for decades about the lack of STEM preparedness of the American workforce. As somebody once said “Talk is cheap and actions speak louder than words!”

Until next time…

Good Luck and Good Teaching!!!!

 

Sanofi Inching Closer to Purchasing Genzyme

Posted in BioBusiness

The buzz at the JP Morgan Healthcare Conference that is taking place in San Francisco this week is that Sanofi-Aventis and Genzyme are close to inking a deal. As you may recall, Sanofi made an unsolicited offer last summer to buy the troubled orphan drug manufacturer. Sanofi offered to purchase Genzyme for $69 per share but the offer was summarily rejected as “too low” by Henri Termeer, Genzyme’s embattled CEO who has been running the company for over 20 years since its inception.

The very public and often acrimonious haggling over the purchase price has become legion in some investment banking and bioventure circles. Nevertheless, most industry and financial analysts predict that Sanofi will prevail and ultimately acquire Genzyme possibly for a share price in the low to mid $70s.  Sanofi desperately needs Genzyme to get into the biotechnology fracas; a field that it seemingly chose to largely ignore for the past 20 years–go figure!  Consequently, it is likely that Sanofi will eventually give Genzyme everything it wants to consummate the deal

Yet, despite progress being reported from the conference, Termeer and Sanofi Aventis CEO Chris Viehbacher haven’t met face-to-face to discuss the terms of a possible deal. However, Viehbacher did mention that Sanofi was “still committed” to purchasing Genzyme.

Stay tuned for the next installment of the saga.

Until next time…

Good Luck and Good Job Hunting!!!!!!!!

 

Tis the Season….Pfizer's CEO Abruptly Announces His Departure

Posted in BioBusiness

Late last week, Merck appointed Ken Frazier, a lawyer, to be the company’s next CEO. Frazier’s appointment, while expected, was historical because he was the first African American tapped to be the CEO of a major pharmaceutical company. Industry insiders contend that Frazier’s unlikely ascension is a tribute to his affability, PR prowess and ability to successfully use his considerable legal skills to navigate Merck through its troubled Vioxx era. 

On the other hand, industry analysts and Pfizer shareholders have been less enamored of the performance of Jeffrey B. Kindler, another lawyer, who has led the company since 2006 when its former CEO Hank McKinnell Jr tried to single-handedly destroy the world’s largest drug maker. Kindler joined Pfizer in 2002 as its chief counsel after working at General Electric and McDonalds—clearly a man with little or no previous pharmaceutical industry experience. While critics contend that Kindler did a laudable job after stepping into the breech, there was consensus among a majority of Pfizer shareholders that it was time for a change at the top.

In a statement Sunday, Kindler announced that he wanted to “recharge my batteries, spend some rare time with my family and prepare for the next challenge in my career.” During his tenure, Kindler oversaw the acquisition and merger of Pfizer and Wyeth and successfully oversaw a settlement for illegal marketing of the painkiller Bextra which included a $1.3 billion criminal fine: the largest health care fraud case and criminal fine for a pharmaceutical company in US history.

The reason for Kindler’s unexpected and sudden departure is likely the impending patent expiry (2011) for its top selling cholesterol drug Lipitor (Pfizer acquired Lipitor after purchasing Warner Lambert Pharmaceuticals in the mid 1990s). Recent financial reports indicate that Lipitor accounted for $11.4 billion of Pfizer’s $50 billion in sales last year or 23% of its revenue. Most industry analysts agree that navigating Pfizer in a world without Lipitor will require an individual with many years of pharmaceutical industry experience and moxy.

To that end, Pfizer announced that Ian Read, currently head of the company’s biopharmaceutical operations will immediately take over as CEO. According to a profile on Forbes.com, Read is:

Senior Vice President; Group President, Pfizer Biopharmaceutical Businesses since October 2009. Previously, he was President Worldwide Pharmaceutical Operations from August 2006 until October 2009. Mr. Read has held various positions of increasing responsibility in pharmaceutical operations. He previously served as Area President for the Europe, Canada, Africa and Middle East and Latin America regions and Senior Vice President of the Pfizer Pharmaceuticals Group. Mr. Read was elected a Vice President of Pfizer Inc. in April 2001.

Also, Pfizer’s board of directors said that it would elect a new chairman (another position vacated by Kindler’s departure) at a meeting within the next two weeks.

Until next time…

Good Luck and Good Job Hunting!!!!

 

Merck Taps Ken Frazier as Its New CEO–The First African American to Lead a Major Pharmaceutical Company

Posted in BioBusiness

Merck has finally gone where no pharmaceutical company has ever gone before; it today named Ken Frazier, a Harvard-trained African American lawyer as its next CEO. Frazier, who joined Merck in 1992, became general counsel in 1992 and was promoted to President of Global Human  Health last April will succeed Dick Clark (the other one) who will soon reach Merck’s mandatory retirement age of 65. Frazier has always been something of a rising star and his stock (pun intended) has rapidly risen in recent years mainly because of the prominent role he played in managing the fallout from the Vioxx scandal.

While today’s announcement may have been history making, Frazier’s ascension to the top position at Merck was widely expected. Frazier has played a key role in the integration of Schering Plough, which Merck purchased almost two years ago for $42 billion.

Like Clark, Frazier is not a scientist. Given Merck’s thinning pipeline and recent setbacks with its anti-cervical cancer vaccine Gardasil, Frazier, like Clark will have his work cut out for him to restore Merck’s tarnished image to its once impeccable standing in the pharmaceutical industry.

Until next time…

Good Luck and Good Job Hunting!!!!!!