When the execs at Biovail and Valeant sat down with analysts last June to hype their approaching reverse merger, one of the highlights of their discussion focused on the $175 million in cost savings--involving the termination of up to 870 staffers--that would follow the combination of the two developers. It turns out that they were thinking small. This morning the cost synergies had spiked to more than $300 million, and the merger will cost the jobs of fully 25 percent of their combined staffs instead of the 20 percent discussed earlier in the summer.
In what amounts to a Dear John letter for many of their workers, Valeant Chief Executive J. Michael Pearson penned his plans to realize "well north of $200 million" in savings next year with the rest to follow in 2012, according to a report from Reuters. And while R&D efforts will continue to get their backing, Pearson outlined plans to acquire in-line products that can swiftly deliver expanded revenue.
Virtually every big tie-up in biopharma these days involves job cuts. Wall Street demands it and executives at a slate of Big Pharma have delivered with big rounds of cost-cutting moves in the wake of mergers. Valeant has been investing heavily in dermatology drug development, while Biovail has made its reputation in the CNS field.
- here's the Reuters story