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Teva planning to cut 1,500 jobs at Cephalon

If confirmed the plans would see a 35 per cent reduction in Cephalon's workforce

Teva is reportedly planning to lay-off up to 1,500 staff at Cephalon, less than a month after it acquired the US biopharmaceuticals firm.

After agreeing the $6.8bn deal earlier this year Teva said it would lead to $500m worth of synergies, a substantial part of which would come from the elimination of duplicate activities, but the Israeli pharma company has yet to confirm any details.

Teva said such “uninformed speculation” about cuts was unhelpful, telling PharmaNews "it is far too early to predict whether there will be job losses at any of the sites acquired by Teva as part of the Cephalon purchase".

But the company, which is the world's largest generics firm, told Tel Aviv-based Ynetnews that “measures will be taken to reduce the employee list”.

That report suggested many of the job cuts will take place at Cephalon's Switzerland-based generics unit, Mepha. Given that Teva's generic activity already accounts for 70 per cent of revenues, such rumours at least seem logical.

Cephalon employees most likely to be retained include those involved with Teva's brand-drug activities, predominately in cancer, pain management and central nervous system drugs.

When Teva acquired speciality pharma company Barr it let go of 10 per cent of that firm's employees, in contrast the toll on Cephalon could be much higher.

If 1,500 jobs are cut at the company it would work out at around 35 per cent of the company's pre-acquisition workforce.

The deal with Cephalon was completed last month and constituted Teva's largest acquisition of a brand pharmaceutical company to date.

The speculation on job cuts follows Teva's recent completion of a $5m debt offering, the proceeds of which will partly be used to pay down the short-term debts it picked up from the Cephalon acquisition.

11th November 2011

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