Servier plots major layoffs in France after R&D setbacks, payer cuts

Servier president Olivier Laureau

France's Servier is plotting big cuts in its home country as part of a companywide refocus. The privately held drugmaker plans to lay off 610 workers, mostly in its commercial operations within France, where sales have plummeted by almost half over the past 5 years.

Because of "competitive, regulatory and economic pressures," Servier said in an emailed statement, it plans to reorient its efforts toward particular niches, including oncology and biosimilars, and step up its business in emerging markets. The job cuts would help pay for all that--and fund forthcoming drug launches, Servier said.

Servier presented its proposed layoffs to union reps in France. The company has about 5,000 employees in its home country and 21,000 worldwide. The planned cuts would amount to more than 10% of the company's French workforce.

With the layoffs, the company would "deeply reorganize the promoting of Servier France medications," backing away from primary care physicians to focus on specialists and hospital doctors, according to a company statement sent to FiercePharma. Marketing, scientific and support functions on the commercial side would be affected by the cuts, as well as sales reps and managers.

Patent losses have taken a toll at Servier, but the company's drugs have also suffered on price cuts and loss of formulary placements, the company said. High R&D costs have hit the company's bottom line, while delays in regulatory approvals have held back top-line growth. One big flop: Ivabradine, its cardiac current inhibitor, fell short last year in a 19,000-patient trial testing its ability to cut the risk of cardiovascular death in patients with coronary artery disease. Amgen ($AMGN) has the U.S. rights to that drug, which is already approved in Europe for heart failure and stable angina.

Servier's reputation in France has also been tarnished, first by a safety scandal involving its diabetes drug Mediator, and then by a European antitrust crackdown on pay-for-delay deals with generics makers, designed to keep lower-cost competitors off the market. In October, the company was found negligent in failing to pull Mediator off the market sooner, as reports of serious side effects and deaths began to surface. Last July, the European Union fined Servier €330 million (about $450 million at the time) for setting up deals to quash generic versions of its blood pressure drug perindopril.

The upshot: Revenue in France amounted to €250 million last year, out of €4 billion worldwide, as PMLiVE notes.

"This project is difficult but necessary to safeguard the competitiveness of our group in an increasingly difficult market environment," Servier President Olivier Laureau said in the statement posted on the company's French-language website.

As it sharpens its job-cutting ax, the company is also working to re-orient its business, partly by increasing its emphasis on oncology. The company recently teamed up with Pfizer ($PFE) on a CAR-T immunotherapy, and in June, set up a $130 million development-and-marketing deal with Taiho Pharmaceutical on TAS-102, a colorectal cancer drug already approved in Japan and under review in Europe. Meanwhile, a would-be $450 million partnership with Macrogenics on a prospective immunotherapy, enoblituzumab, didn't fare well; Servier walked away from the project last month after getting a look at early trial data. The two are still working on other therapies together, however.

- see the statement from Servier (PDF)
- get more from PMLiVE

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