Endo International PLC, a Dublin, Ireland-based global speciality pharmaceutical company that sells generic and branded prescription drugs, today announced that it plans to layoff 375 US sales employees most of whom work in its branded pain sales force. The company manufactures several branded opioid pain medicines including OPANA ER® and Percocet® Ostensibly, the job cuts will yield will free up $90 to $100 million that the company will used to restructure and refocus its business units.
The ongoing very public national discussion about opioid abuse has caused Endo to re-evaluate its new product development strategy ( the company stock has been hemorrhaging over the past year or so). To that end, the company announced a new focus on the drug Xiaflex, a penis curvature drug that the company acquired in its $2.6 billion buyout of Auxilium. By focusing on new markets, the company hopes to reduce its financial dependency on its legacy opioid business that has been waning as new legislation restricting patient access to opioids continues to be passed in States that have been devastating by the growing opioid epidemic sweeping the US.
Ask any pharmaceutical industry pundits about the “next big thing” in life sciences R&D and most will invariably say neuroscience indications like Alzheimer’s, Parkinson Disease and the like. Curiously, despite these prognostications, GlaxoSmithKline (GSK) today announced that it would lay off 50 employees involved in neuroscience R &D.
The affected workers, all of whom are scientists working on late stage clinical development at various sites throughout the US, were first notified about the layoff on Valentine’s Day (nice gift). Interestingly, a GSK spokesperson was quick to point out that other neuroscience employees including marketing and sales would not be affected by the layoffs. Hm mm, I always thought you needed scientists to discover the drugs that will ultimately be marketed and sold by a company? In any event, no GSK operations outside of the US were affected by this round of layoffs.
The reason why the layoffs only affected clinical scientists is because GSK scaled back its investment into early stage research. And, according to the GSK spokesperson this means that “there’s not as much coming through that needs later stage clinical trials.” Also, last year, after GSK released fiscal 2009 results, the company announced it would “cease discovery research in selected neuroscience areas, including depression and pain.” I guess most of the layed off scientists worked on depression and pain (two emotions that layed off workers frequently suffer).
In case you haven’t noticed (because you spend too much time in the lab and on Facebook), most major pharmaceutical and biotechnology companies have slashed their investments into new drug discovery and development. This means that the demand for R&D scientists (in the US anyway) is much lower than ever before. Consequently, as I have stated numerous times in the past, now may be the time for graduate students and postdocs considering industrial R&D careers to re-evaluate their plans (unless R&D careers in emerging markets like Brazil, Russia, India and China are attractive).
Pfizer today announced that it will purchase Bristol, TN-based King Pharmaceuticals for $3.6 billion in cash or $14.25 per share: an approximately 40% premium over King’s closing share price yesterday.
King is a diversified specialty pharmaceutical drug delivery and clinical development company with expertise in delivery of easy to abuse or misuse pain medicines, self injecting delivery devices and animal health
The acquisition will help Pfizer push forward with its new emphasis on biopharmaceuticals and rare disease drugs; both currently require parenteral administration to patients.
The King acquisition is consistent with Pfizer’s M&A strategy to enter new therapeutic areas and markets. In the last 10 years or so Pfizer has acquired Warner Lambert, Pharmacia, Wyeth and several smaller companies including Sugen, Copely Pharmaceuticals, Encysive Pharmaceuticals, Serenex and others.
Whether or not Pfizer can successfully integrate King’s expertise and business units into its existing monolithic corporate structure remains to be see. Pfizer is still trying to right itself after it acquired Wyeth Pharmaceuticals for $65 billion early last year.
Big pharma companies—flush with cash—have been on a buying spree of late. Unfortunately, the availability of this cash is directly related to the massive downsizing and layoffs that have taken place in the industry over the past few years. That said, if I were a King employee, I would be dusting off my resume!