Bracing for the loss of a patent on a blockbuster blood-pressure drug, Swiss drug maker Novartis (NYSE:NVS) disclosed plans on Friday to slash another 2,000 U.S. jobs as part of a restructuring plan.
The Basel-based pharmaceutical company cited the impending loss of its exclusivity patent on high-blood pressure drug Diovan in the U.S. as well as a setback for blood-pressure pill Rasilez.
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Diovan, which is expected to lose its exclusivity in September, is the top-selling drug at Novartis, generating $6 billion in sales a year.
“We recognize that the next two years will be challenging in the Pharmaceuticals Division and we are proactively making these changes to further focus our pipeline on the best opportunities and align our market position on our growth brands,” David Epstein, head of Novartis Pharmaceuticals, said in a statement.
Novartis said it plans to lay off 1,960 workers in the U.S. in a downsizing that comes on top of previous plans to cut 2,000 jobs in the U.S. and Switzerland. The latest job cuts include 1,630 field force positions and an additional 330 jobs tied to a realignment of headquarters functions.
Employees are expected to be notified in early April and job cuts will take effect in the second quarter.
The move is expected to generate savings of $450 million by 2013 and result in a first-quarter charge of $160 million.
Novartis also said the negative study on Rasilez has prompted it to take a charge of $900 million in the fourth quarter as it reassesses future sales. Further charges of $160 million will be taken related to the termination of another pair of drugs.
“These are difficult but necessary decisions that will free up resources to invest in the future of our business which we view as well suited to bring new valuable therapies to patients and payors,” Epstein said.
Hurt by the gloomy news, U.S.-listed shares of Novartis fell 2.43% to $55.35, compared with a 0.90% decline on the S&P 500 amid concerns about Europe’s debt crisis.