Actelion Launches First Job Cuts
07/12/2012| 03:56am US/Eastern
ZURICH--Actelion Ltd. (ATLN.VX) will cut its workforce by up to 5% as part of its new cost-cutting program, as Europe's biggest biotechnology company by sales wrestles with the strong Swiss franc and the tough European market.
The cuts will be the first at Actelion since it was founded in 1997.
The company, based in Allschwil, Switzerland, Thursday said it could reduce up to 135 positions from its 2,500-strong workforce by the end of 2012, but didn't say how much it hopes to save from the cuts.
"In order to take full advantage of the growth opportunities ahead of us, we must take decisive action now," said Chief Executive Jean-Paul Clozel.
Around 70 jobs, mostly in R&D and general administration, are likely go at the Allschwil site in Switzerland, where 1,100 employees are currently based. Another 45 currently vacant positions won't be filled, Actelion said.
Pharmaceutical companies have recently been forced to act on steep drug price cuts in Europe and the U.S. and declining revenues as patents on key drugs expire.
Last month, Swiss pharmaceutical company Roche Holding AG (ROG.VX) said it would close a research-and-development site in Nutley, N.J., while Novartis AG (>> Novartis AG) said in January it needs to save between $1.5 billion and $2.5 billion this year to stay on track.
Actelion, founded by two former Roche scientists, has been dealt a string of product setbacks, and is now banking on a new lung and heart drug called macitentan to become its new blockbuster product.
The company announced that it would be embarking on a cost-saving program in May. At the time, it said earnings wouldn't grow again until 2014 as new medicines and cost cuts would take time to offset falling sales of key pulmonary hypertension drug Tracleer.
Actelion has previously forecast flat core earnings for 2012 as it prepares for declines in sales of Tracleer, which accounts for around 90% of company sales but goes off patent in 2015.
In the first three months of 2012, the company reported a 16% decline in core earnings in Swiss francs--almost double the 9% fall in local currencies--as the currency traded at high levels against the dollar and the euro.
Actelion also Thursday said it is refocusing its R&D efforts toward rare diseases and specialty indications to generate more specialty franchises.
At 0704 GMT, Actelion shares were down CHF0.31, or 0.8%, at CHF40.56.
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