Sector News

Novo Nordisk cutting 185 jobs, adding another 70 in commercial revamp

November 10, 2017
Life sciences

Still dealing with intense pricing pressure in its key diabetes business, Novo Nordisk has decided to cut 185 jobs in its commercial organization and add another 70, a spokesperson told FiercePharma.

The company is “evolving its commercial model to position the organization to be more competitive, withstand market challenges and fully leverage the significant innovations we are bringing to customers and patients,” Novo’s spokesperson said via email. “As part of this effort, we are restructuring the commercial organization and some existing positions, approximately 185, are being eliminated while new roles, approximately 70, are also being created.”

The cuts come right on the heels of Novo’s third-quarter results, when it reported sales that slightly missed Wall Street consensus expectations due to shortfalls for diabetes drugs Tresiba and Levemir. Revenues for the quarter were up 2% over last year and profits were up 5%, the Danish drugmaker reported.

“After the changes are implemented, we expect to have roughly the same number of employees or actual people working at (Novo Nordisk) as we do today,” Novo’s spokesperson continued. “We know this can be disruptive to our employees and we’ll offer our full support to those affected, including consideration for new positions when appropriate.”

Last year’s long-acting insulin launch Tresiba, stalwart GLP-1 drug Victoza and its sister weight-loss injection Saxenda, which has the same active ingredient, have helped fuel revenue gains so far in 2017. Their sales increased 117%, 15% and 80% versus last year, respectively.

Still, the company issued a cautious 2018 guidance as it hangs its growth ambitions on Saxenda, the blockbuster candidate semaglutide and new launch Fiasp. Novo is calling for 2018 growth in the low-to-mid single digits, and a 3% to 4% hit from currency. Jefferies analyst Jeffrey Holford wrote that the guidance seems below “consensus expectations, as the company faces competition … and price pressure in diabetes.”

Separate from diabetes, Novo faces a potential fight in hemophilia from Roche’s emicizumab. That candidate won an FDA priority review back in August.

Along with Sanofi and Eli Lilly, Novo has been reeling from increased diabetes pricing pressure in the U.S., forcing each of the drugmakers to undergo their own reorganizations. Novo last year had to eliminate 1,000 positions in R&D and commercial operations in an effort to sharpen its focus on “truly innovative” products.

For its part, Eli Lilly recently announced a round of 3,500 cuts as it looks to save $500 million per year. The Indianapolis-based drugmaker said this week that 2,300 employees have taken early retirements in that effort. Sanofi last year had to cut 20% of its U.S. diabetes sales force, and more than 500 positions in France.

By Eric Sagonowsky

Source: Fierce Pharma

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