Job cut likely as Roche aims to trim £1bn

Published on Thursday 2 September 2010 23:14

Swiss drugmaker Roche is likely to axe jobs in a £1bn cost-cutting review designed to cope with recent setbacks on key drugs and rising pressures on prices from healthcare reforms.

The world's largest maker of cancer drugs, once seen as the darling of the pharmaceuticals industry, has seen its crown slip after blows to its development programme this year.

Investors are now waiting to see whether the FDA will revoke approval for its blockbuster breast cancer drug Avastin.

"In view of mounting pressures to curb healthcare costs together with recent developments in late-stage projects in the Roche pipeline, this initiative aims to adapt cost structures and accelerate productivity improvements group-wide," Roche said. It did not provide any details on the size of cost cuts or the number of staff and units affected.

Roche stock has slipped over 20 per cent so far this year, underperforming a 4 per cent rise in the sector index.

Swiss newspaper Sonntag had reported that the group could slash thousands of jobs across drug sales, research and development, production and the pharma division's administration.

Sarasin analyst David Kaegi said there was overcapacity in the sales team - numbering around 1,500 in the United States and Europe - after a recent delay to its diabetes drug candidate taspoglutide and the fact that Roche had one of the highest research and development spending rates in the industry.