Abbott Laboratories bested several rivals when it won the bid for Solvay Pharmaceuticals. But thousands of its employees are probably wishing someone else had picked up that $6.1 billion deal, leaving Abbott to focus on its own pipeline instead. In the wake of the Solvay merger, Abbott announced 3,000 integration-related job cuts. And now, the company says it's going to axe another 1,900 jobs, 6 percent of its U.S. workforce.
Abbott blames the latest cuts in part on a "challenging regulatory environment." Translate that to "a string of development setbacks." It was counting on an experimental psoriasis drug to help boost sales, but ended up spiking that program on FDA safety concerns. In December, it stopped working on a prospective cholesterol treatment that combined two drugs already on the market.
Meanwhile, the merger and related cost-cutting weighed on fourth quarter earnings, which fell by 6 percent year over year to $1.4 billion. Sales, however, grew by 13.4 percent to $9.9 billion. CEO Miles White said 2010 was a "productive" year, despite a "challenging environment." Besides the pipeline woes, Abbott dealt with two recalls last year, one of glucose testing strips and the other of baby formula found to contain beetles.
- check out the Abbott release
- see the Chicago Tribune story
- get more from the Wall Street Journal