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Daiichi Sankyo cuts a swathe through US workforce

Plans to shed upto 1,200 jobs across the US
Daichii Sankyo

Japan's Daiichi Sankyo is planning to the slash the size of its US workforce as it contends with the loss of patent protection for top-selling drug Benicar.

The company said in a statement that it intends to shed 1,000 to 1,200 positions "across the US commercial function", with the layoffs coming mainly from its main office in Parsippany, New Jersey, and from its national sales force.

$2.4bn-a-year high blood pressure drug Benicar (olmesartan) is due to succumb to generic competition in the coming months and it is not uncommon for a big brand to lose two-thirds of its revenues after generics reach the market.  Around $900m of the brand's revenues came from the US market last year.

Moreover, as the drug accounts for quarter of its group turnover Daiichi Sankyo is facing a particularly challenging time, and the latest round of reductions comes after the company had already announced a 16% cut in head office staff in March.

That decision came after Daiichi Sankyo lost patent protection in the US for cholesterol-lowering drug Welchol (colesevelam), a smaller brand than Benicar that nevertheless had US sales in the region of $300m a year.

The US R&D unit in Edison, New Jersey will be largely unaffected by the restructuring, as will the firm's packaging plant in Bethlehem, Philadelphia, according to Daiichi Sankyo.

Ken Keller, who heads the commercial operations for the company in the US, said the decision had been difficult but was a necessary move as the company re-orientates its US business away from primary care and towards specialty drugs in the "cardiovascular, pain management and oncology" categories.

"This calls for us to restructure our organisation into a smaller, highly targeted and efficient operating model, with a greater emphasis on customer-facing roles," he added, noting that the changes reflect "macro changes occurring in the US healthcare system that place a greater emphasis on managing the needs of patients with more complex healthcare needs."

The company is hoping that newer products such as novel oral anticoagulant (NOAC) Savaysa/Lixiana (edoxaban) will eventually fill the void left by Benicar, which is facing a challenging start as it will have to compete with three well-established blockbuster drugs in the NOAC category.

The company will need late-stage pipeline candidates to deliver if it is to ride out the impact of losing Benicar exclusivity. These include tivantinib for liver cancer - tipped by some analysts as a $600m product despite disappointing data in lung cancer - quizartinib for leukaemia and mirogabalin for fibromyalgia.

Article by
Phil Taylor

20th October 2015

From: Sales



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