Fierce Pharma has;
Austerity, Generics Push Lundbeck To Cut 600 Jobs
With Cipralex facing copycats, Danish drugmaker's sales ops need overhaul
The demise of Lexapro's patent protection strikes again. Denmark's Lundbeck, which developed the antidepressant and sells it in Europe under the Cipralex brand name, will cut 600 jobs, mostly in Europe, where austerity has dealt another blow to the drugmaker's fortunes.
The job cuts are part of an overhaul of its commercial organization in Europe, the company said in a statement. Lundbeck wants a "more flexible" approach to primary-care detailing as it prepares for hoped-for product launches. No doubt referring to the decline of its big-selling Cipralex, the company said it's aiming "to pave the way for a successful transition of Lundbeck's European product portfolio."
Make no mistake: The layoffs are meant to save money, too. Europe's crackdown on drug prices has squeezed drugmakers, flattening out growth curves and, in some cases, pushing them to negative territory. "The market environment is changing rapidly," CEO Ulf Winberg said in a statement. "To ensure a successful transition ... we need a more flexible commercial infrastructure and to maintain cost control."
Lundbeck expects a charge to 2012 earnings from the restructuring plan, though it's not sure how much. It's estimating to spend up to 500 million Danish crowns on the plan ($84.6 million).
Earlier this week, Forest Laboratories ($FRX) took a hit from the same drug, sold in the U.S. as Lexapro. Its exclusive U.S. rights to the antidepressant made it Forest's biggest seller, delivering more than half of the company's sales. Now that Lexapro faces generic rivals, branded sales are plummeting even more quickly than Forest had expected. For Lundbeck, the patent impact is less dramatic, with exclusivity expiring in one country after another through 2014.
Thank You Fierce Pharma and Ms Staton
