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Novartis will cut nearly 2,000 jobs in the US ahead of the patent expiration of its Diovan (valsartan) drug and an expected reduction in demand for Rasilez / Tekturna (aliskiren) following the termination of the ALTITUDE clinical study.
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The Swiss drug maker will book a charge of $900m in the fourth quarter after the clinical study of Rasilez / Tekturna in patients with diabetes and renal impairment showed the treatment resulted in an increased incidence of non-fatal strokes, renal complications, hyperkalemia and hypotension. The patent for Diovan, a top-selling hypertension medication, is set expected in the US in September 2012.
Novartis Pharmaceuticals division head David Epstein said the next two years will be challenging but insisted the cuts to jobs will help the company focus on its growth brands."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," he added.
Novartis will cut 1,630 jobs in the US general medicine business and a further 330 positions will go in April 2012.
The restructuring, to result in a charge of $160m, is expecting to produce savings of $450m by 2013.
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Caption: Novartis expects to save $450 million by 2013, following the job cuts.
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