Novartis said early Friday morning that it would cut 1,960 jobs in the United States within the next few months to deal with the impending loss of revenue from a key drug and the loss of potential revenue from a drug the company hoped would help its cause.
Novartis is based in Basel, Switzerland, and it made the announcement before the Swiss stock exchanged opened Friday.
The cuts will mean job losses for 1,630 sales representatives in the U.S.
The company will cut 330 jobs from its U.S. headquarters in East Hanover, N.J.
Novartis' generic division, Sandoz, has a facility in Princeton and its Consumer Health division is in Parsippany. The company's Alcon Research division is in Sinking Spring, near Reading.
Those components will not lose jobs under the plan announced Friday, Novartis spokesman Eric Althoff said in an e-mail to The Inquirer.
Novartis' market-leading hypertension medicine Diovan will lose patent protection in the United States in September, so generic companies can begin selling their version for less money, which will mean lower sales and profit for Novartis.
The company also recently stopped a study of Rasilez/Tekturna in high-risk group of patients with type-2 diabetes and renal impairment.
"We recognize that the next two years will be challenging in the pharmaceuticals division and we are proactively making these changes to further focus our pipeline on the best opportunities and align our market position on our growth brands," David Epstein, division head of Novartis Pharmaceuticals, said in a statement. "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."
As for the finances, Novartis said it hoped to save $450 million through 2013 by making the cuts. It will take a charge of $160 million in the first quarter of 2012 to deal with restructuring costs. It also will take a $900 million charge against 2011 fourth-quarter earnings to account for reassessment of expected revenue from Rasilez/Tekturna.