AstraZeneca cuts 1,150 U.S. jobs, adds on in China

It's becoming the fashion for drugmakers to announce job cuts in the U.S. and expansions in Asia in almost the same breath. Eli Lilly ($LLY) did it in fall 2009, saying it would cut 5,500 jobs in U.S. and other established markets as it doubled its sales force in China. Novartis ($NVS) did it just last month, when it disclosed plans to slash 2,000 jobs, including more than 1,000 in Switzerland, while adding 700 jobs in China, India and other low-wage countries.

Now, it's AstraZeneca ($AZN). Yesterday, the U.K. drugmaker said it would cut its U.S. sales operation by 1,150 jobs, including reps and managers. That's about 24% of the salesforce. The cuts come on top of 400 U.S. job losses announced in October, Reuters points out. Workers will have the chance to volunteer to leave, the company said in a statement, with all decisions wrapped up by February.

Today, the company announced a deal to buy Chinese generics maker Guangdong BeiKang Pharmaceutical. It's AstraZeneca's second outright acquisition of a generics company, although it has inked partnerships with Aurobindo Pharma and other emerging markets firms. And it's the drugmaker's latest expansion move in China, where it's already the second-biggest foreign pharma; the company recently said it would plow $200 million into a manufacturing facility there. "The Chinese market has seen a slowdown this year ... but we will deliver double-digit growth," AZ's Asia-Pacific chief Mark Mallon told Reuters.

The sales cuts aren't unexpected to anyone who's been watching drugmakers as they lose patent protection on key drugs. Blockbusters like AZ's stomach drug Nexium and antipsychotic Seroquel don't need heavy-duty sales support once they face generic competition. And as we mentioned, the Chinese expansion isn't unexpected either. Any drugmaker worth the price of a pill is stepping up in China, thanks to strong growth projections for the coming years. "[F]rom a strategic standpoint, this remains the biggest growth opportunity that we have," Mallon told Reuters. The only question is which drugmaker will be next to make a tandem announcement.

- see the release from AstraZeneca
- read the Reuters news
- get more from Reuters
- check out the MarketWatch story

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