Sector News

Valeant starts $500M in Salix cost-cutting with 250 layoffs

April 7, 2015
Life sciences
After closing its deal for Salix Pharmaceuticals, Valeant wasted no time getting down to business with the cost-cutting it’s known for. And now, North Carolina’s Triangle area has another 250-plus pharma layoffs to add to a growing list.
 
Valeant will send 258 Salix staffers packing, the Triangle Business Journal reports–an announcement that came one day after the companies officially tied the knot. The job-shedding will begin this week and carry on through Oct. 30, with the cuts hitting a wide range of job functions.
 
One area that’s safe, though, is specialty sales. After signing their original pact in February–a $10 billion offer that the Canadian pharma upped to $15.8 billion after pressure from rival bidder Endo–Valeant CEO J. Michael Pearson acknowledged that he’d need that award-winning sales force and Salix’s hospital, key account and field reimbursement teams to help his company foray into the GI arena.
 
“We believe Salix’s sales force is, by far, the strongest in the GI space and it has been a key part of their success,” he told investors on a conference call, noting later that, “we believe these customer-facing roles have played and will play a huge role in the success of the company.”
 
The layoffs are part of a cost-savings drive that will top $500 million if Pearson gets his way. As Evercore ISI analyst Umer Raffat pointed out in a February note to clients, that equates to about 75% of Salix’s SG&A and R&D expenses. But that kind of penny-pinching is par for the course for Valeant, whose business model relies on wringing money out of plentiful acquisitions. Last month, it did the same at Dendreon, chopping 77 positions from the bankrupt oncology outfit it picked up shortly before Salix.
 
Meanwhile, though, it’s a tough time to be a Triangle pharma staffer, the TBJ points out. More than 1,000 industry employees have recently been dismissed, thanks to Hospira–which Pfizer agreed to buy up earlier this year–and GlaxoSmithKline, which is wielding the ax to compensate for lost sales of fading blockbuster Advair.
 
By Carly Helfand
 

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

November 27, 2020

AbbVie lifts insider Jeffrey Stewart to commercial chief as company veteran Carlos Alban retires

Life sciences

AbbVie will soon have a new chief commercial officer, who’ll assume the heavy responsibility of navigating the Illinois pharma’s marketing transition from megablockbuster Humira.

November 27, 2020

Belgium biotech argenx nabs Bayer speedy review voucher for a cool $98M

Life sciences

The biotech, which has a series of deals across Big Pharma, will use the voucher, which can speed up the regulatory process for a new drug, for its late-stage drug efgartigimod—but not in the indication you might think.

November 27, 2020

Galapagos sells off Fidelta as CRO activities ‘no longer fit with its strategy’

Life sciences

Galapagos is selling off its contract research organization Fidelta for $37 million to Polish life science company Selvita. Fidelta focuses on inflammation, fibrosis and anti-infectives, with 181 employees at the helm.

Send this to a friend