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Gilead Sciences Inc
Actelion Ltd. (ATLN) plans to cut 135 jobs and refocus research on rare diseases and specialty pharmaceuticals as sales decline for the company’s best-selling product, the Tracleer blood-pressure drug.
The cost savings will reduce research spending, and some projects will be stopped, the Allschwil, Switzerland-based company said in a statement today. Actelion will take a charge against 2012 earnings, though the amount hasn’t been determined yet, the company said.
Lowering expenses will address challenges including the strength of the Swiss franc, increased competition in the U.S. and lower prices and government reimbursement for drugs in Europe, the company said. The jobs, to be cut in research and administration, equal 5.3 percent of the company’s workforce of about 2,570 people, according to the annual report.
“It’s good to see they’re doing the right thing,” Michael Leuchten, an analyst at Barclays Capital in London, said in a telephone interview today. “It’s a bit more than they had been talking about” at a briefing in May, when the company said it would seek cost reductions in research, and not administration.
Actelion fell 1.8 percent to 40.13 Swiss francs in Zurich, giving the company a market value of 5.2 billion francs ($5.3 billion). The stock has returned 0.2 percent in the past 12 months, including reinvested dividends, compared with an 18 percent return in the Bloomberg Europe Pharmaceutical Index.
The company will provide a business update when it reports half-year earnings on July 19, it said in today’s statement. Actelion said in May earnings will remain stable in 2013 before rising in 2014 and accelerating to “double-digit” growth in 2015 as a new blood-pressure drug spurs sales. The company said at the time that it planned deeper cost cuts and more targeted spending on research and development.
Sales of Tracleer fell to 1.5 billion Swiss francs last year as the drug faces increased competition from Gilead Sciences Inc.’s (GILD) Letairis.
“In order to take full advantage of the growth opportunities ahead of us, we must take decisive action now,” Chief Executive Officer Jean-Paul Clozel said in the statement. “We will maintain the earning power of our business, thereby balancing long-term growth opportunities with short-term profitability enhancement.”
Trial results announced in April of an experimental drug called macitentan suggested Actelion has succeeded in developing a successor for Tracleer, the blood-pressure medicine that accounts for 87 percent of sales and will face competition from cheaper copycat pills in 2015.
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