AstraZeneca’s (LSE: AZN, OMXS: AZN, NYSE: AZN) numbers were pretty much as expected in Q4 2011. Full-year core EPS was up by more than 8% to $7.28. The company said it lost 3 billion in revenues to generic competition and government savings programs. Most of the recent revenue growth has come from emerging markets. Dividend will be increased to 2.8 USD a share.
Actions stemming from another restructuring initiative will once again lead to large personnel cuts. In total approximately 7300 jobs will be affected. Half of those will be in Selling, General and Administrative category 2200 in R&D and some 1350 within support functions in Operations.
R&D department feels the wrath of recent clinical trial failures and overall weak pipeline. Even AstraZeneca itself has clearly lost trust in the future results as evident by recently changed guidance for pipeline contributions into sales in the coming years. Neuroscience department will be nearly wiped out and remaining operations will be conducted virtually.
In Sweden the research center in Södertälje will be closed and 1000 jobs will be cut. This comes fresh on the heels of the closure of Lund research facility and leaves AstraZeneca with just one R&D facility in Sweden.
Just a little more than a decade ago pharmaceutical industry was big business in Sweden but after the two high profile mergers (Pharmacia and Upjohn and subsequently Pfizer and of course Astra & Zeneca) and ensuing cuts, big pharma research has been nearly eradicated.
AstraZeneca expects to be able to reap $1.6 billion of annual benefits from 2014 onward. The resructuring is estimated to cost a total of $2.1 billion. The company will also shut down R&D facility in Montreal, Canada. The stock responded negatively to the report.
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