In another split-personality pharma announcement, Lundbeck reported strong second-quarter sales and street-beating profits; said its full-year numbers would hit the upper end of its guidance; and announced it would lay off up to 175 people in R&D. Of course, earnings are a snapshot of the past, and payroll is forever. But Lundbeck also said it would hire up to 300 new sales reps, including some in the U.S.
The rationale for these moves has two parts: One, Lundbeck is fighting copycat rivals for its branded drugs, and it's bracing for new competition to its leading drug, the antidepressant Cipralex, sold as Lexapro in the U.S. by Forest Laboratories. The company says it expects to lose about 90% of U.S. Lexapro sales by 2013.
Two, it's suffering under healthcare reforms and austerity spending. And given the financial turmoil over the past several days, it's expecting more to come. "We are experiencing increasing pressure from generic competition and from healthcare reforms in many countries, and therefore it is necessary for us to focus sharply on keeping our costs under control," CEO Ulf Wiinberg said, adding that the "world economic crisis...will probably lead to more healthcare reforms."
In laying off R&D staff, Lundbeck is far from alone; a who's who of Big Pharma has been doing the same as companies pare back development programs and farm work out to contract research organizations. Hiring sales reps? That's a different story; many drugmakers have slashed their sales forces by hundreds if not thousands, particularly in the U.S., with hiring focused mostly in rapidly growing emerging markets, such as China and India.
- see the release from Lundbeck
- read the Reuters news