Sector News

Actavis cuts 200 California jobs, providing a glimpse of what is in store at Allergan

December 3, 2014
Life sciences
California’s Allergan desperately wanted to avoid a hostile takeover by Valeant, fearful it would ravage its R&D operations in favor of its marketing oriented approach to the business. So it turned to Actavis as a white knight. But Actavis is also known to cut jobs with impunity to make deals pay and Allergan need look only a few miles down the road for proof of that as Actavis prepares to lay off 200 at it operations in Corona, CA.
 
The cuts, outlined in a state filing are set for Jan. 2, according to the Orange County Business Journal. Nothing more is outlined in terms of what kinds of jobs will be lost.
 
Actavis and Allergan just last month reached a quickly negotiated $66 billion deal, derailing months of effort by Valeant to buy the Botox maker for about $54 billion. One of Allergan’s arguments against pairing up with Valeant is a belief that it would take an ax to its R&D operations, cutting people to cut dollars. But in announcing its Allergan deal, Actavis noted that it can realize “at least $1.8 billion in annual synergies commencing in 2016, in addition to the $475 million of annual savings previously announced by Allergan.” And synergies inevitably mean job cuts.
 
In fact, Actavis has always been up front that duplication is part of any merger and so whacking jobs is an unpleasant necessity of growth. It has been just over a year ago that it announced it would lay off about 30% of its sales force in the U.S. after completing its its $8.5 billion merger with Warner Chilcott. That was about 350 jobs.
 
In July, after closing its deal to buy Forest Laboratories, it handed out pink slips to about 200 employees who had worked for Forest in the St. Louis, MO area. That came even as top execs were themselves handed up to $186 million in “merger success awards” for closing the $25 billion deal. Actavis has yet to say how many jobs might be lost as a result of its melding with Allergan but the Botox maker will be adding 11,500 employees to the approximately 25,000 Actavis already has.
 
As for the cuts in Corona, the Business Journal points out that it was the original home of the company that started out as Watson Pharmaceuticals, the small generics maker that has bought and built its way into an operation now slated to have $23 billion in annual revenue.
 
By Eric Palmer
 

comments closed

Related News

September 22, 2023

Novo Holdings acquires biopharma company Paratek for $462m

Life sciences

Novo Holdings has concluded the acquisition of all outstanding shares of commercial-stage biopharmaceutical company Paratek Pharmaceuticals for nearly $462m (€433.67m) to bolster its antimicrobial resistance (AMR) expertise. Paratek develops and commercialises new treatments for life-threatening ailments. Its speciality pharmaceutical platform aids in developing new therapeutics.

September 22, 2023

Glenmark Pharma to divest 75% stake in life sciences unit for $680m

Life sciences

Glenmark Pharmaceuticals has signed a definitive agreement for the divestiture of a 75% stake in its division, Glenmark Life Sciences (GLS), to Indian company Nirma in a deal valued at Rs56.51bn ($679.85m). Glenmark Life Sciences focuses on producing active pharmaceutical ingredients (API).

September 22, 2023

Lonza-CEO Ruffieux to leave Swiss CDMO

Life sciences

Pierre-Alain Ruffieux, CEO of Lonza, will leave the Basel-based company at the end of September. According to the Swiss Contract Development and Manufacturing Organization (CDMO), the separation is by mutual agreement.

How can we help you?

We're easy to reach