A Merck ($MRK) active pharmaceutical ingredient (API) manufacturing plant in Ireland will cut about 20% of its workforce to lower its costs.
Workers at the API plant in Brinny in Cork County were informed Wednesday that 90 jobs will be eliminated over the next 6 months, the Irish Times reports. A spokeswoman told the newspaper that an analysis had indicated that the company had sufficient supplies of APIs for tablets in stock so it needed fewer workers.
Site manager Matt Corcoran said the company had looked at different ways to get needed cost savings "but reducing workforce was necessary and sadly unavoidable for the site to stay competitive."
Cost cutting is an industry catchphrase in the current pharma market. Merck has some promising drugs in its pipeline, like a once-weekly drug for Type 2 diabetes. But like other companies whose blockbuster drugs have been undercut by generics, Merck is dealing with a challenging revenue outlook.
In Merck's case, the drug is Singulair, and the impact came faster than expected. According to recent data, sales of the allergy and asthma drug fell nearly 90% in just four weeks after generics were approved. "There's been a rapid decline and loss of sales," Adam Schechter, president of Merck's global human-health unit, told investors in New York last month.
Singulair last year accounted for $3.3 billion of Merck's sales. For the most recent full quarter, Singulair brought in $1.43 billion. But with 10 generics lined up against it, a crash was inevitable.
- here's the Irish Times story
Merck's Singulair sales free-fall 90% in 4 weeks
Merck pumped about promising IIb results for once-weekly diabetes drug