Novartis AG to Eliminate Up to 110 U.S. Jobs Through Voluntary Retirement Offering

Novartis AG to Eliminate Up to 110 Positions Through Voluntary Retirement Offering
May 28, 2015
By Alex Keown, BioSpace.com Breaking News Staff

CHICAGO – Basel, Switzerland-based Novartis AG will eliminate up to 110 positions from various facilities in the United States through a voluntary retirement program, the company confirmed to BioSpace this morning.

Novartis did recently offer a Retirement-Eligible Voluntary Separation Program to a select population of associates. This was voluntary for retirement-eligible associates in select functions and areas of the business. The total number of US-based associates who we expect to participate is approximately 110,” a Novartis spokesperson told BioSpace this morning.

While confirmed, the company did not disclose anything else about the voluntary retirement. No information was provided on which departments will be impacted by the retirement, how the retirements will impact operations, when the voluntary retirements will begin to take place or what the total savings for the company will be after the retirements occur.

Novartis’ stock was up this morning, trading at $103.88, up from the morning opening price of $103.59 per share.

Novartis has certainly had its shares of ups and downs recently. The company has been working with a number of startups in hopes of forging new paths in therapies. This week Novartis partnered with the Bay Area’s Rani Therapeutics on a method to deliver large molecule drugs, which are typically administered as an injectable, in a “robot pill” form through the use of smart technology.

Additionally, Novartis and Indiana-based Eli Lilly were part of a group that backed startup Aeglea BioTherapeutics in $44 million in Series B. Financing. The $44 million investment will be used to support the continued development of Aeglea’s pipeline of engineered human enzymes that target diseases at the extremes of abnormal metabolism.

A Novartis study may also hold the key to a fountain of youth pill. A promising study of the bacterial agent rapamycin showed improvements in autoimmune responses of elderly patients, which may be helpful in unlocking the key to an anti-aging medication. A clinical trial of elderly patients showed a high percentage of those provided with rapamycin showed a 20 percent boost in percent improvement in their immune response after being given an influenza vaccine.

Additionally the study showed the reduction of PD-1 receptors in patients, which inhibits T-cell signaling.

But, the company has also seen its recent share of controversy. In February Japan’s health ministry ordered the Japanese unit of Novartis AG to halt sales and manufacturing of prescription drugs for 15 days for failing to report the side effects of some medications. In December The Japan Times reported Novartis failed to report a total of 3,264 cases of patient health problems possibly caused by adverse effects of 26 types of drugs sold by the company. The company conducted an internal probe of its practices after issues arose over data collected in trials its blood pressure drug Diovan and two leukemia drugs.

Also in March two former employees filed a $110 million gender discrimination suit against Alcon Laboratories, Inc. , a division of Novartis AG, alleging the company fosters a “boys club” attitude that is hostile to women. The two plaintiffs, Elyse Dickerson and Susan Orr, say the company specifically violated Title VII of the Civil Rights Act of 1964, which prohibits gender discrimination by employers, and the U.S. Equal Pay Act. In 2010 Novartis was ordered to pay more than $250 million in a separate class action that alleged widespread gender discrimination. At the time the judgment was awarded it was the largest discrimination judgment in U.S. history. Following that judgment, Novartis agreed to implement reforms to prevent further discrimination.



Will PfizerKline Become the Next Pharma Player?
The speculation surrounding a possible bid from Pfizer Inc. for struggling GlaxoSmithKline is heating up, after one closely-watched biotech analyst said in a note last week that Pfizer buying the company would “unlock access to its balance sheet and improve its tax situation.”

Gregg Gilbert, a biotech analyst at Deutsche Bank, wrote in a note to investors “Introducing PfizerKline” that he thinks a deal would be “materially accretive” for both companies. Gilbert estimated that a bid priced at $29.86 a share, via half stock and half cash, which would push up Pfizer’s earnings per share by 10 percent to 16 percent beginning in 2016.

“We believe that the company has a sense of urgency to create value by leveraging the power of its balance sheet to do needle-moving deals,” Gilbert wrote. “Since media reports in the past have pointed to the potential for a Pfizer/GSK combination, we are revisiting that theme.”

We want to know, dear readers, if you agree? Should Glaxo continue going it alone, or might Pfizer buy it and create one of the world’s largest pharma players in history?

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