AstraZeneca to cut 7,600 jobs

AstraZeneca to cut 7,600 jobs
LONDON: Anglo-Swedish drug maker AstraZeneca Plc said it will cut some 7,600 jobs as part of a major cost reduction plan. The company had announced in March that it planned to reduce its head count by 3,000, but on Thursday, as it came out with its second quarter financial results, it said it will cut a further 4,600 jobs.

The job cuts are expected to result in $900 million in annual savings by 2010.

The company said its second-quarter net income fell to $1.43 billion, or 95 cents a share, compared with $1.6 billion, or $1.02, a year earlier. The fall in earnings had been on account of the $15.6 billion acquisition of U.S. biotech company MedImmune in April. Revenue during the quarter rose 9.8 per cent to $7.27 billion. Its best-selling ulcer drug, Nexium, which is the fourth best-selling medicine in the world, brought revenue of $1.3 billion, which is an increase of 2.3 per cent over the corresponding period last year. Sales of its schizophrenia drug Seroquel rose 13 per cent to $963 million. The company is planning to apply for regulatory approval in the U.S. to use the drug to tackle depression.

AstraZeneca faced several research setbacks last year. The purchase of MedImmune and Cambridge Antibody Technology Group were intended to supplement its portfolio. However, MedImmune had an operating loss of $103 million during the period.

The company cut its 2007 underlying earnings forecast per share to between $3.90 and $4.05 from $3.80 to $4.05 made previously.

The company's chief executive David Brennan said the additional job cuts would be in Europe, the U.S. and Canada and in marketing and research and development departments. Some 700 positions are expected to go in the R&D, 1,800 in information systems and business infrastructure, 1,800 in European sales and marketing and 3,300 in operations

Brennan said, "We are determined to maintain a competitive financial performance in the challenging environment that affects the pharmaceutical sector.''

AstraZeneca has eight experimental products in the last stage of testing.