Late January has been filled with big layoff news, as Novartis announced it would axe 1,900 people, Takeda upped the ante with 2,800 and Alylam let everyone know that it was cutting some one-third of its workforce. On the hells of all that, there is a bit of good news/bad news, with Abbott saying 700 workers are now looking at pink slips even as Bayer AG says it will be creating 1,000 new jobs in Australia.
What made the Abbott news a bit more notable than it might have been otherwise, in the face of larger layoff elsewhere, was that it had only just the day before presented a favorable financial report, saying diluted earnings per share grew11.5 percent; worldwide sales increased 4.1 percent, to $10.4 billion; fourth quarter results included an adjusted gross margin ratio ofnearly 64 percent, driven by improved efficiencies across a number ofoperating divisions, product mix, and the effect of foreign exchange; that Abbott "continued to advance its broad-based pipeline, andlaunched several new products or indications across our Pharmaceuticals,Medical Products, Nutritionals and Diagnostics businesses;" and that Abbott generated record operating cash flow of more than $9 billionin 2011, and as such will resume share repurchase activity in 2012.
"Despite another challenging year for the global economy, Abbottagain delivered leading performance, including strong sales and ongoingearnings-per-share growth," said Miles D. White, chairman and CEO of Abbott. "2011 was a significant year for Abbott, withthe announced plan to separate into two leading health care companiesin research-based pharmaceuticals and diversified medical products, eachoffering shareholders distinct identities with unique investmentopportunities. We remain on track to complete the separation by the endof 2012."
The 700 layoffs are primarily in manufacturing operations, with plans to eliminate several hundred additional positions over thecourse of the year, according to the company, which attributed at least some of the layoffs to the impending mid-2012expiration of Abbott's contract to supply the artery-opening stentPromus to Boston Scientific Corp.
On the other hand, international pharmaceutical giant Bayer plans to boost its investment in Australia and create nearly 1,000 jobs there. That news, however, is tempered, however—at least for those of us in the pharma/biotech world—by the fact that the boosts seem to be centered around its crop-care business, meaning a very indirect benefit to the pharma side.
Bayer, which already has operations in healthcare, cropscience and material science in Australia, is planning to boost itsworkforce of 850 people over the next three tofour years. However, getting back to the positive side with a more pharma twist, the introduction of new medical products to the Australian marketover the next few years is also expected to boost Bayer's Australian salesrevenue by more than 10 percent each year until it reaches an expect $1 billion or more by 2015.