Novartis to Reduce Employee Numbers

Novartis AG (NYSE:NVS) announced plans to cut its U.S. employee strength by nearly 2,000 in the face of a multitude of problems relating to expiry of patent protection and failed drugs.

Don’t Miss: 9 Early Movers: Novartis Down Over 2%, JPM Reports Earnings, Metabolix Plummets 55%.

Novartis’ $6 billion blood pressure drug, Diovan, went off-patent in Europe last year and does so in the U.S. in September. Its other blood pressure pill, Rasilez, once touted as the replacement for Diovan, failed in clinical trials, and the company will book a once-off charge of $900 million in the fourth quarter in this respect. Another hit of $160 million, also in the fourth quarter, is on account of failed trials of PRT 128, or elinogrel, and SMC021 or oral calcitonin, which have been suspended.

“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,” David Epstein, the group’s pharma chief, said in a statement.

The group also faced problems in its consumer health unit due to a number of product recalls and announced a charge of $120 million in this regard a few days ago.

Investing Insights: CLARCOR Inc. Fourth Quarter Earnings Sneak Peek.

To contact the reporter on this story: Brooke Edge at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com