Biotechs crowd list of top growth leaders as Big Pharmas shrink staffs

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Anyone even remotely interested in the biopharma industry will not be surprised to hear that many of the biggest companies in the business have been working overtime to shrink staffs. EP Vantage--an arm of EvaluatePharma--put its analysts to the task of examining the numbers, though, and found that the overall amount of downsizing isn't quite as big as you may have been led to believe.

Boosted by growth in emerging markets as sales forces get chopped in the U.S. and Europe, EP Vantage concluded that the top 11 companies have only managed to drop 4% of the numbers they registered back in 2007. Last year, employment levels in the top group were flat. Overall employment in 2012 was set at 932,825 versus 968,909 in 2007--a drop of about 36,000.

But while Big Pharma companies have been changing its mix of staffers around the world, Big Biotechs have been taking up much of the slack. Looking at other drug developers with a market value north of $30 billion, EP Vantage concluded that employment grew by almost 40,000. Companies like Celgene ($CELG, up 179%), Gilead Sciences ($GILD, up 68%) and Biogen Idec ($BIIB, up 38%) have picked up the slack over the past 5 years.

Their success at developing big new products is clearly making the biotech industry the best place to find job security--for now. If revenue numbers ever make a change for the worse, job numbers will quickly follow. Here's a look at the top growth companies, followed by a list of pharma giants slashing staffs.

Check out the article from EP Vantage for more.

-- By John Carroll (email | Twitter), Ryan McBride (email | Twitter) and Tracy Staton (email | Twitter)

Biggest Job Growth

1. Celgene

CEO: Robert Hugin
Based: Summit, NJ

Staff Changes:

  • 2007-12: Up 179%
  • 2011-12: Up 5%

Staff Totals:

  • 2012: 4,700
  • 2011: 4,460
  • 2010: 4,182
  • 2007: 1,685

Celgene ($CELG) has more than doubled its staff in the course of making Revlimid into one of the world's best-selling cancer drugs. Under the leadership of CEO Bob Hugin, the biopharma powerhouse has also been one of the most nimble biotech dealmakers, acquiring Pharmion for $2.9 billion in 2008 to add Vidaza to its growing arsenal of therapies to attack blood disorders and Abraxis for the same amount in 2010 for the anticancer therapy Abraxane. Through internal growth and acquisitions, the biotech giant's staff rose steeply to 4,700 workers in 2012 from just 1,685 in 2007, according to figures from EP Vantage.

2. Gilead Sciences

CEO: John Martin
Based: Foster City, CA

Staff Changes:

  • 2007-12: Up 68%
  • 2011-12: Up 11%

Staff Totals:

  • 2012: 5,000
  • 2011: 4,500
  • 2010: 4,000
  • 2007: 2,979

Gilead Sciences' ($GILD) claim to fame has been its growth into the world's largest provider of branded HIV drugs. Yet the company has also swelled its ranks through organic expansion and acquisitions in the oncology, cardiovascular and hepatitis fields. CEO John Martin pulled the trigger on the $11 billion buyout of Pharmasset in late 2011, by far the largest M&A gamble over the past 5 years and one that could pay off with a blockbuster treatment for hepatitis C. According to data from EP Vantage, the company's workforce stood at 5,000 at the close of 2012. That number could swell as the company gears up for the launch of sofosbuvir, potentially in early 2014, for hepatitis C and new therapies against cancer.

3. Teva

CEO: Jeremy Levin
Based: Petach Tikva, Israel

Staff Changes:

  • 2007-12: Up 65%
  • 2011-12: Up 0%

Staff Totals:

  • 2012: 45,948
  • 2011: 45,754
  • 2010: 39,660
  • 2007: 27,912

Teva ($TEVA) will likely not stay on the growth chart for much longer. The company is best known as a generic drugmaker, but as EP Vantage notes, it's been building up the specialty pharma side of the business as well. Under CEO Jeremy Levin, Teva held its staff growth in check last year, with a new 5-year plan aimed at some ambitious cost-cutting. Now that its big blockbuster Copaxone is facing the arrival of generic competition as early as spring 2014, analysts are getting anxious about how Teva will be able to grow in years to come. And that cloud is likely to overshadow its workforce as well, as execs ponder whether it needs to cut its employee roster. Its fate may well hinge on a longer-acting version of Copaxone, but early generic competition could bite deep into earnings.

4. Biogen Idec

CEO: George Scangos
Based: Weston, MA

Staff Changes:

  • 2007-12: Up 38%
  • 2011-12: Up 19%

Staff Totals:

  • 2012: 5,950
  • 2011: 5,000
  • 2010: 4,850
  • 2007: 4,300

Biogen Idec ($BIIB) is now the largest independent biotech based in Massachusetts, which is saying something because the company operates alongside Genzyme, which was acquired by Sanofi ($SNY) in 2011, Vertex Pharmaceuticals ($VRTX) and a bevy of other major players in arguably the hottest hub of activity for the industry on earth. Last year Biogen's staff grew by 19% year over year to 5,950 workers, according to data from EP Vantage. CEO George Scangos has kept the company on track to grow with the recent FDA approval of the MS pill Tecfidera and a maturing pipeline of therapies for hemophilia. Its workforce even grew despite an R&D reorganization Scangos triggered in November 2010 that was supposed to claim 650 jobs.

5. Novo Nordisk

CEO: Lars Rebien Sørensen
Based: Hellerup, Denmark

Staff Changes:

  • 2007-12: Up 36%
  • 2011-12: Up 6%

Staff Totals:

  • 2012: 34,731
  • 2011: 32,632
  • 2010: 30,483
  • 2007: 25,516

The silver lining around the dark cloud created by an epidemic of diabetes is fattening Novo Nordisk's ($NVO) revenue numbers as well as the size of its staff. In the first quarter of this year, its booming insulin franchise helped drive a 28% increase in profits. And its blockbuster diabetes drug Victoza has helped fuel its growth as well. Despite the solid roll Novo finds itself on, there are hints of discomfort. The EU approved Tresiba, its counterpunch to Sanofi's ($SNY) Lantus. But the FDA wouldn't go along, demanding a new study to determine whether there's any serious heart risk involved. The FDA is also concerned about a potential risk of pancreatic cancer for patients taking Victoza. Still, there's no sign of a major slowdown anytime soon. Novo Nordisk is in the right disease with the right products at the right time.

6. Baxter International

CEO: Robert L. Parkinson, Jr.
Based: Deerfield, IL

Staff Changes:

  • 2007-12: Up 11%
  • 2011-12: Up 5%

Staff Totals:

  • 2012: 51,000
  • 2011: 48,500
  • 2010: 48,000
  • 2007: 46,000

The medical products giant--which is buying the Swedish dialysis company Gambro for $2.8 billion--saw revenue surge in the second quarter, in line with expectations that the company will end the year with a 7% or 8% spike in sales. Baxter ($BAX) is rolling out a longer-acting version of Gammagard in Europe, which should help keep the number growing, while it works out some details with the FDA. And analysts give the company credit for its work on growing the hemophilia market for Advate. There's also a new approval for Rixubis, a new therapy for hemophilia B. Still, Baxter did have to concede that Gammagard failed to improve Alzheimer's symptoms, a long shot at best. And there's some competition for the hemophilia market from Biogen Idec ($BIIB), which is also on the list of fast-growing companies.

7. Amgen

CEO: Robert Bradway
Based: Thousand Oaks, CA

Staff Changes:

  • 2007-12: Up 3%
  • 2011-12: Up 1%

Staff Totals:

  • 2012: 18,000
  • 2011: 17,800
  • 2010: 17,400
  • 2007: 17,500

EP Vantage is quick to note that Amgen ($AMGN) looks more like a struggling pharma giant than a go-go biotech company: "Despite being the first big biotech on the scene, (the company) is arguably more closely related now to big pharma with its ageing blockbuster franchise and struggles to find new growth drivers." Generic biosimilar competition is inevitable for its blockbuster anemia franchise, which will take a deep bite even if the company manages to pass a string of new state laws governing the way pharmacies will have to act if they substitute a brand name with a biosimilar. The company has a fat late-stage pipeline, thanks to former R&D chief Roger Perlmutter. But risks remain high. No wonder then that Amgen is looking to buy out Onyx ($ONXX) and add its cancer therapies to the mix. The upfront cost of $130-or-so a share might require some finagling on the financial side, but Amgen needs to find some way to grow quickly. And CEO Robert Bradway's history as an investment banker makes him a savvy player at the M&A game.

Biggest Job Cuts

1. Bristol-Myers Squibb

CEO: Lamberto Andreotti
Based: United States

Staff Changes:

  • 2007-12: Down 33%
  • 2011-12: Up 4%

Staff Totals:

  • 2012: 28,000
  • 2011: 27,000
  • 2010: 27,000
  • 2007: 42,000

Girding for its patent cliff, Bristol-Myers Squibb ($BMY) began a parade of layoffs with 4,800 announced in 2007, in a plan to save $1.5 billion, and then added another 2,800 the following year. Since then, as sales of its top-selling blood thinner Plavix have dwindled and other patent losses neared, the cuts have come by the hundreds. BMS announced almost 500 last year, to pare its Abilify sales force. But the payroll shrinkage also stemmed from spinoffs and sales; BMS sold its wound care unit Convatec in 2008, losing 3,400 employees, and in 2009 hived off its baby formula business, Mead Johnson, along with its 6,000 employees. So, its headcount of 42,000 in 2007 had plummeted to 29,000 by 2009. By 2012, it counted 28,000 employees, an increase of 4% over 2011.

2. AstraZeneca

CEO: Pascal Soriot
Based: United Kingdom

Staff Changes:

  • 2007-12: Down 23%
  • 2011-12: Down 10%

Staff Totals:

  • 2012: 51,700
  • 2011: 57,200
  • 2010: 61,100
  • 2007: 67,400

AstraZeneca ($AZN) has been a perennial entry on the FiercePharma top layoffs list, kicking off with 7,600 cuts announced in 2007. And that was just the beginning. The company's workforce shrank to 61,100 in 2010 from 67,400 in 2007--and by 2012, it had 51,700 employees to its name. The reasons why are no mystery: The company lost patent protection on its biggest product, the antipsychotic drug Seroquel, and it's bracing for generic competition to its stomach-acid drug Nexium. Pascal Soriot, who signed on as CEO last fall, has more restructuring planned, too. AstraZeneca will shed another 1,600 jobs as it shakes up management, moves its headquarters and consolidates around the world.

3. Eli Lilly

CEO: John C. Lechleiter
Based: Indianapolis, IN

Staff Changes:

  • 2007-12: Down 6%
  • 2011-12: Up 1%

Staff Totals:

  • 2012: 38,350
  • 2011: 38,080
  • 2010: 38,350
  • 2007: 40,600

The air has been leaking from Eli Lilly's ($LLY) employment balloon for a decade. From a high of 45,000 in 2003, Lilly's workforce dwindled by 1000 or 2000 almost every year through 2010. Since then, the company has hovered at around 38,000 workers--but that doesn't mean it hasn't been cutting jobs. Anticipating the 2011 loss of patent protection on its megablockbuster Zyprexa, Lilly announced 5,500 cuts in 2009, or about 13.5% of its payroll. There was a definite geographic bias to that restructuring; CEO John Lechleiter said at the time that he planned to hire several thousand workers in China and other fast-growing markets. So, the reductions in one part of the world were buffered by gains elsewhere. Now, with generic competition for top-selling Cymbalta looming, more Lilly employees face termination. About 1,000 sales workers will lose their posts, some of them contract workers whose jobs were already set to expire.

4. GlaxoSmithKline

CEO: Andrew Witty
Based: United Kingdom

Staff Changes:

  • 2007-12: Down 4%
  • 2011-12: Up 2%

Staff Totals:

  • 2012: 99,488
  • 2011: 97,389
  • 2010: 96,461
  • 2007: 103,483

GlaxoSmithKline ($GSK) has slashed jobs by the thousands year after year since 2007, with 5,000 cuts announced that year and several thousand more in 2008, 2009 and 2010. But after taking a big dive to 96,461 in 2010 from 103,483 in 2007, GSK's employee count has remained remarkably stable. While Glaxo decimated its sales ranks in the U.S. and Europe, and restructured and consolidated R&D, it hired hundreds of people in fast-growing emerging markets, aiming to grab as much market share as possible. The company also brought in new workers by snapping up a series of smaller pharma businesses around the globe, sometimes to beef up in particular markets, sometimes to snatch promising drug candidates. But GSK is sharpening up the jobs ax again; it's now planning a £1 billion cost-cutting drive, and it expects layoffs to be part of the picture, particularly in Europe.

5. Pfizer

CEO: Ian Read
Based: New York, NY

Staff Changes:

  • 2007-12: Up 6%
  • 2011-12: Down 12%

Staff Totals:

  • 2012: 91,500
  • 2011: 103,700
  • 2010: 110,600
  • 2007: 86,600

Don't let Pfizer's ($PFE) employee growth fool you. Pfizer did have just 86,600 employees in 2007, but that was two years before it bought fellow drug giant Wyeth. As that deal came to fruition, Pfizer announced that it would whack 19,500 jobs from the combined company. And as Pfizer digested the acquisition the next year--and kept an eye on the 2011 expiration of Lipitor's patent--it identified more places to cut: about 8,480 of them, in fact. Now, Pfizer is concentrating on shedding entire divisions. Selling its nutrition business to Nestle last year helped push employment numbers down by 12%, to 91,500, a few thou more than it had in 2007. Look for more of that: Pfizer spun off its animal health unit Zoetis, and it's restructuring into three business units, to see whether it wants to split up further.

6. Merck

CEO: Kenneth Frazier
Based: Whitehouse Station, NJ

Staff Changes:

  • 2007-12: Up 39%
  • 2011-12: Down 3%

Staff Totals:

  • 2012: 83,000
  • 2011: 86,000
  • 2010: 94,000
  • 2007: 59,800

At first glance, Merck ($MRK) looks like the biggest job creator in Big Pharma. That's an illusion. Yes, it had just 59,800 workers in 2007 and boasts 83,000 now. But it added tens of thousands of workers in one fell swoop in 2009 by buying rival drugmaker Schering-Plough, putting its 2010 headcount at 94,000. Meanwhile, the company was laboring to shed jobs--it announced 8,400 cuts in 2008, before the merger--and then, as the deal wrapped up, said it would shed another 16,000 jobs. It added 12,000 cuts to the quota in 2011, focusing on administrative layoffs and manufacturing shutdowns. But would those savings be enough? The company has lost billions in sales of its now-off-patent asthma drug Singulair and has suffered a series of blows to its R&D hopes. In late July, the company slashed its 2013 sales forecast again. So, it's probably no surprise that August began with news of more payroll trimming.

 

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