A management review at Bayer could result in job cuts and outsourcing the company’s drug-testing services, according to Reuters. The new report comes just months after a German business weekly said that up to 1,000 positions could be on the chopping block as the company reviewed some of its research sites.
At the time, the German pharma did not confirm that the cuts would happen and added that it reviewed its business operations all the time.
The R&D review started in January and will last until at least November, a person familiar with the company told Reuters. It will explore whether drug-testing services should be outsourced to cheaper contractors, the source said. Labor representatives concerned that jobs might move outside the company are participating in the talks.
Last quarter, the company’s growth leaned on three drugs—blood thinner Xarelto, eye drug Eylea and pulmonary arterial hypertension drug Adempas—as sales for cancer drugs Xofigo and Stivarga fell short. Its top seller, Xarelto, will go off patent in 2024, while Eylea is facing rising competition in the form of Novartis’ brolucizumab. Revenues from these two drugs are expected to peak in the next six years, Reuters reported.
“That gives Bayer a window of one to three years to licence something in and, if not, to show that something is yet to emerge from its earlier-stage pipeline,” said Markus Manns of Union Investment, a Frankfurt-based fund manager who holds Bayer shares.
RELATED: Bayer pays $400M upfront to buy into Loxo cancer drugs
In a major reorganization last November, Bayer combined its pharma R&D unit under one division and under one leader: Joerg Mueller. The new unit brought together all R&D activities for therapeutic areas across the company’s pharmaceuticals division, including cardiology, gynecology, ophthalmology, hematology and oncology research.
The makeover came after the German pharma put up $400 million—with an additional $1 billion on the table—to buy into Loxo Oncology’s tropomyosin receptor kinase inhibitor franchise. But that same month, Bayer and partner Regeneron ended a combination trial of Eylea and the latter’s nesvacumab after data from trials in patients with diabetic macular edema failed to impress.