Sumitomo Pharma’s hundreds of layoffs last summer weren't enough for the struggling company to stem the tide as its revenues decline and its bond prices crater.
Now, the Japanese drugmaker is letting go of 400 staffers this month.
The job cuts at Sumitomo Pharma America come amid a “severe business environment” and are part of an effort by the company to boost organizational efficiency and streamline operations, the company said in a press release (PDF).
The company has not met certain targets in its midterm business plan, which spans 2023 to 2027, Sumitomo said.
Sumitomo generated 235 billion Japanese yen ($1.57 billion) between April 1, 2023, and Dec. 31, 2023, a whopping 48.9% decline from 460.2 billion yen ($3.07 billion) during the same period in 2022.
The company attributed the decrease, in part, to the U.S. loss of exclusivity for its antipsychotic Latuda. Generics of the med, which is indicated for schizophrenia and bipolar disorder, hit the market in the first half of 2023.
Still, Sumitomo touted “growing sales” of three key products, although it does not disclose revenues for individual products. Those products are prostate cancer med Orgovyx, overactive bladder treatment Gemtesa and Pfizer-partnered uterine fibroid therapy Myfembree, which recently won an FDA label expansion to treat endometriosis.
Besides Sumitomo's declining revenues, Bloomberg notes that the company's credit profile is weakening. For instance, the price of a September 2050 bond issued by the company has declined by 41%, according to the news service.
Along with the job cuts, which will take effect this month, the company plans to implement a new organizational structure in its sales and marketing department to bolster the key meds.
Sumitomo has already been busy slashing expenses. Last July, the company cut 500 jobs, according to the recent release.
Besides those two recent rounds of layoffs, Sumitomo also cut its head count by 360 at its Marlborough, Massachusetts, site in early 2023.