What happened to the multinational pharmaceutical company that laid off thousands of people globally and sold its Chinese subsidiary?
阿豆学长长ov
发表于 2024-8-5 14:29:06
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In 2024, the main keywords surrounding multinational pharmaceutical companies are "layoffs", "pipeline cuts", and "clinical shutdowns". The global market layout of multinational pharmaceutical companies is undergoing a new round of transformation pains.
Recently, market news reported that FibroGen, a US pharmaceutical company specializing in the development of First in class drugs, announced that it will cut about 75% of its US team employees. At the same time, due to the failure of CTGF inhibitor pamrevlumab in late stage clinical trials for indications such as Duchenne muscular dystrophy and idiopathic pulmonary fibrosis, the company has decided to stop the development of the drug.
Takeda Pharmaceuticals also experienced large-scale layoffs. Starting from July this year, Takeda Pharmaceuticals announced the start of a restructuring plan, laying off 495 employees at its Cambridge, Massachusetts plant and 146 employees at its Lexington plant. Takeda Pharmaceutical disclosed that this move is aimed at reducing costs and increasing efficiency, with a total profit of 225 billion yen (approximately 1.4 billion US dollars) in the 2024 fiscal year (as of March 2025), and further improving its core operating profit margin. Recently, Takeda Pharmaceutical's layoffs are still progressing. On August 2nd, Takeda Pharmaceutical announced plans to close its research and development center in California and lay off 1000 employees in the United States.
In addition to layoffs, some multinational pharmaceutical companies have also made plans to sell their subsidiaries in the Chinese market. On August 1st, Concord Kirin announced the launch of a major restructuring of its Asia Pacific business, including the transfer of all equity of its Chinese subsidiary, Concord Kirin (China) Pharmaceutical Co., Ltd., to Hong Kong Weijian Pharmaceutical Group. The transaction is expected to be completed on September 30th at a transfer price of RMB 720 million.
For the plan of selling the Chinese subsidiary of Concord Kirin, 21st Century Business Herald reporters contacted relevant personnel of Concord Kirin as soon as possible. A person close to Concord Kirin told 21st Century Business Herald reporters that the news is true. Concord Kirin has a certain position in the rare disease drug market, but its layout in the rare disease market is also quite difficult. The company's move this time is basically a strategic adjustment made to cope with global market challenges, "the person said.
When it comes to the current survival environment of multinational pharmaceutical companies, some pharmaceutical industry analysts from securities firms told 21st Century Business Herald reporters that the market environment has changed over time. Nowadays, the success of enterprises not only depends on the investment of human and material resources, but also requires comprehensive consideration of policies, product lines, and research and development capabilities. Therefore, even large companies may face the risk of failure, and adjusting market strategies is necessary.
Layoffs, layoffs, layoffs
For multinational pharmaceutical companies, the layoff crisis in 2024 is still ongoing, and cost reduction and efficiency improvement are also important goals for multinational pharmaceutical companies in 2024.
According to industry consulting firms, the global health industry will continue to face challenges in 2024. In the first quarter, the number of layoffs was close to 3000, and in the second quarter, global pharmaceutical and device companies reported more than 45 layoffs. Layoffs and streamlining organizational structure have become new trends for top pharmaceutical companies.
According to Fierce Biotech's 2024 statistics on layoffs in biopharmaceutical companies, as of July 31, over 80 biotech companies worldwide have carried out layoffs in 2024, including large multinational pharmaceutical companies such as Novartis, Sanofi, Roche, Takeda, Bristol Myers Squibb (BMS), Pfizer, and Bayer. In the wave of layoffs, middle and senior management as well as core R&D personnel have been affected.
For example, in June of this year, Pfizer's DMD (Duchenne muscular dystrophy) gene therapy PF-06939926 failed clinically and did not reach the primary endpoint. Pfizer immediately gave up all development of the therapy and there were reports that Pfizer would lay off employees at its main development site, Sanford, for PF-06939926, with the number of layoffs possibly reaching 200.
On July 31st, Sumitomo Pharmaceutical announced that the company has decided to implement an early retirement plan for its employees. As of November 30th of this year, employees who are over 40 years old and have been with the company for more than 5 years all meet the requirements, with a target of approximately 700 people. The scale of early retirement recruitment this time is the largest in the history of the company, with preferential measures including increasing special retirement benefits on top of normal retirement benefits and providing reemployment support for employees in need.
In the announcement, Sumitomo Pharmaceutical informed its employees of the reasons for implementing an early retirement plan. The company experienced significant losses in profit and loss attributable to the parent company owners for two consecutive fiscal years in March 2023 and March 2024, resulting in continued poor performance. Although the target for the March 2025 period is to achieve a turnaround in core operating profit, it is expected that the current period's profit and loss attributable to the owners of the parent company will still be at a loss.
Previously, Sumitomo Pharmaceutical had implemented layoffs in the United States, reducing approximately 2200 employees to around 1200 in the previous fiscal year ending in March 2024, cutting nearly half of its workforce. This time, Sumitomo Pharmaceutical has decided to reduce personnel in Japan and stated that it will reduce research and development expenses, focusing its operating resources on areas such as regeneration and cell medicine, which are positioned as the next growth engines.
The above-mentioned analyst told 21st Century Business Herald reporters that the main reasons for multinational pharmaceutical companies to carry out large-scale layoffs and streamline product pipelines include a response to the current market environment, as well as considerations of cost control, strategic adjustments, and improving research and development efficiency. For example, large pharmaceutical companies are now reducing their own R&D investment and turning to introducing high success rate products from other small pharmaceutical companies, which has greatly shrunk their R&D teams.
For example, five years ago, the demand for PD-1 was extremely high, and many companies invested heavily in recruitment. However, with changes in the market environment, the demand for PD-1 has sharply declined, and many companies have had to lay off employees. This fully demonstrates that in the current market environment, relying solely on the scale and strength of large companies is no longer sufficient to guarantee success The analyst believes that multinational pharmaceutical companies can use measures such as layoffs and streamlining product pipelines as short-term means to reduce costs and improve operational efficiency. In the long run, pharmaceutical companies still need to rely on the research and development of innovative drugs and market promotion to achieve sustained and stable growth in performance.
Currently, multinational pharmaceutical companies are facing challenges and adjustments in their operations in the global market, such as selecting partners and optimizing pipeline layouts. These factors will all affect the survival and development environment of pharmaceutical companies.
Strategic adjustment of the layout in China
In addition to layoffs, the move to "exit" the Chinese market has also become a major dynamic for multinational pharmaceutical companies recently.
According to public information, Concord Kirin will undergo a significant restructuring of its Asia Pacific business. The main contents of the restructuring include three aspects:
Transfer of business in China. Concord Kirin will transfer all equity of its subsidiary Concord Kirin China Pharmaceutical Co., Ltd. in China to WinHealth Pharma in Hong Kong. The transaction is expected to be completed on September 30, 2024, with a transfer price of 720 million yuan (approximately 15 billion yen).
Authorized cooperation. Weijian Pharmaceutical will also obtain authorization to sell the mature drug combination of Concord Kirin, including five brands, in China. Concord Kirin will also sign a licensing agreement with Weijian Pharmaceutical to commercialize Concord Kirin's global products Crysvita and Poteligeo.
Business adjustments in other regions of the Asia Pacific. In six regions outside Chinese Mainland (Singapore, South Korea, Taiwan, China, Malaysia, Thailand, Hong Kong/Macau), Kyodo signed licensing and distribution agreements with DKSH Holdings Co., Ltd., involving the commercial rights of seven mature drug brands and some global products.
In the eyes of many industry insiders, the measures taken by Concord Kirin are also determined by the current development of the Chinese pharmaceutical market. The current market environment requires companies to understand every value of the market and products earlier in order to better position their products and formulate market strategies.
When it comes to the operational models and challenges of multinational pharmaceutical companies in the Chinese market, some pharmaceutical executives analyze that as the Chinese market continues to expand and mature, multinational pharmaceutical companies are facing the challenge of how to more effectively penetrate this vast market. Due to the large number of hospitals in first, second, and third tier cities in China, and the need for significant resources and time to cover and penetrate each hospital, choosing distributors as a cooperative model for sales and market expansion has become particularly important.
Meanwhile, it is necessary to pay attention to the impact of cost control policies on the pharmaceutical market. In China, the government's strict cost control policies for medical insurance pose significant challenges to the pricing and marketing strategies of multinational pharmaceutical companies. In order to adapt to this environment, pharmaceutical companies need to adjust their business models to comply with the government's medical insurance negotiations and price control requirements.
In an increasingly strict regulatory market environment like China, multinational pharmaceutical companies need to ensure that all their operations comply with local laws and regulations. This includes working with compliance teams with local experience, as well as learning from foreign companies' experiences in the European and American markets to help them meet compliance standards in the Chinese market. In addition, facing the complexity and enormous potential of the Chinese market, it is difficult for a single company to tackle all challenges alone. Therefore, establishing partnerships and utilizing external resources and channels will be one of the key strategies for the success of multinational pharmaceutical companies, "said the executive of the pharmaceutical company.
Regarding the sale of its subsidiary, Concord Kirin stated that this restructuring is aimed at responding to changes in the external environment, optimizing resource allocation, ensuring continuous supply of drugs, and laying the foundation for the company's sustainable development. After the restructuring, Concord Kirin will conduct business activities in the Asia Pacific region through partnerships, similar to the joint venture strategy adopted in Europe last year.
The company expects that this restructuring and equity transfer will have a certain impact on its financial performance for the 2024 fiscal year. Concord Kirin has included the relevant impacts in the revised financial forecast released on the same day, and has promised to immediately announce any further matters that need to be disclosed.
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声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
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