Tuesday, October 1, 2013

Merck to Fire 8,500 Workers in Cost-Cutting R&D Shift

Story first appeared in  Bloomberg News.

Merck to Fire 8,500 Workers in Cost-Cutting R&D Shift

Merck & Co. (MRK), the second-biggest U.S. drugmaker by sales, will fire 8,500 workers and revamp its research and development after seeing new medicines delayed by U.S. regulators.

The 8,500 jobs to be eliminated are in addition to the 7,500 positions Merck has already announced, the Whitehouse Station, New Jersey-based company said in a statement today. The combined number equals about 20 percent of the workforce.

The overhaul is part of a new strategy being set by R&D chief Roger Perlmutter. Chief Executive Officer Ken Frazier hired Perlmutter in April to replace Peter Kim, under whom experimental drugs in cardiovascular, surgery, and osteoporosis encountered development setbacks.

New primary care drugs developed before Perlmutter took over either haven’t been approved, or are likely to face limited sales. Suvorexant, a sleep pill, in July wasn’t approved by U.S. regulators at the two highest doses, and the lower dose isn’t available yet. The medicine will also face competition from existing, widely used generic medicines. Odanacatib, an experimental osteoporosis treatment, has been delayed while the company conducts a second study.

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