Hundreds of people are now joining the increasing number of layoffs from generic drugmaker Mylan NV (NASDAQ:MYL), as the pharmaceutical company contends with bad press and subsequently weak earnings reports. The Mylan layoffs in 2017 are part of cost-saving measures and the latest round of U.S. job cuts hitting West Virginia.
Mylan has also had a rough time of it on the stock market, alongside the pharma job cuts that have plagued it and a number of other companies in the industry.
The company was subjected to intense scrutiny in August 2016, following a tweet from Senator Bernie Sanders, who criticized the company for hiking the prices of its “EpiPens” from $57.00 to $600.00.
In 2007, when Mylan first started selling their EpiPens, they only cost $57. Last week, the price was $600. https://t.co/az4XOpQoPE
— Bernie Sanders (@BernieSanders) August 29, 2016
The call-out came at a time when the industry as a whole was being targeted for what were seemingly abusive price-hiking practices carried out by a number of companies, sometimes on life-saving or life-preserving drugs.
The tweet caused a massive shock to the stock, leaving Mylan floundering in the aftermath. While before the senator’s tweet the company’s stock hung around $50.00 a share, it has since tumbled down by about 25%. It has yet to recover over a year later. This was compounded by Mylan’s revenue decline, which has been further exacerbated by a poor showing in its most recent quarterly report.
The fallout from the stock drop and Twitter attack were factors in Mylan’s restructuring announcement in December 2016. It needed to help mitigate the damage it had experienced in the wake of the tweet. The restructuring projected many additional Mylan job cuts to come.
Mylan Layoffs 2017: Around 300 Let Go in West Virginia
About 200 to 300 people are being added to the number of Mylan layoffs for 2017 following the latest announcement from the company. The cuts hit two sites in Monongalia County, West Virginia: Greenbag Road and Collins Ferry Road. The layoffs were primarily in the accounting, human resources, corporate security, customer relations, and customer complaints departments.
“Around this time last year, we announced restructuring programs in certain locations representing initial steps in a series of actions designed to further streamline operations globally,” read a statement released to local news from Mylan. “As part of this process, we anticipated that less than 10 percent of our global workforce would be impacted across all geographies and businesses. These changes are a part of this previously announced restructuring that we are continuing to execute on.
“These decisions are about keeping Mylan fit and positioning the company for another 50 years of successful operations here in West Virginia and around the world,” the statement also says.
The West Virginia layoffs are just the beginning of the problems for the company, however, as it finds itself under investigation by the U.S. government in relation to the EpiPen price increase.
Mylan’s cost-cutting may continue to grow, especially with the most recent quarterly report showing that the company has yet to stage a recovery following its fall in August 2016.
As part of the restructuring plan, the company said that it will cut less than 10% of its total workforce and focus on integrating acquisitions. The company has about 35,000 employees.
Mylan Revenue Drops by 2% in 3rd Quarter 2017 Results
The most recent quarterly results speak to Mylan’s wounded position, with total revenues down two percent compared to a year earlier. The North America segment’s third-party net sales, meanwhile, dropped a staggering 22%. The EpiPen-related decrease in sales alone accounted for about 16% of that fall.
“Our third quarter results, which included adjusted EPS of $1.10, were especially strong considering the ongoing challenges we experienced in the U.S., including accelerated deceleration of EpiPen sales – both from our launch of an authorized generic as well as the contraction of the overall epinephrine auto-injector market,” said Mylan CEO Heather Bresch in a statement. “Our third quarter results also continue to show the durability of our resilient global platform, where we now believe that approximately 75% of our more-than-$2 billion adjusted operating cash flows stems from more predictable, recurring revenues across all markets around the world.”
The sales decline is likely to keep the company looking for cost-cutting measures, which may in turn lead to more Mylan layoffs in 2017, although no announcements have been made since the West Virginia layoffs and there is no new information released as of yet that points in that direction.
Other Major Pharma Layoffs in 2017
When it comes to pharma layoffs in 2017, Mylan is hardly alone.
While the company occupies a particularly difficult position in the public consciousness due to the EpiPen debacle, many other pharma companies have also suffered this year, with job cuts coming about as a result.
Merck & Co., Inc. (NYSE:MRK) instituted mass layoffs, culling jobs from three of its U.S. sales teams. These layoffs affected about 1,800 of Merck’s U.S.-based sales representatives. The teams were consolidated into a single entity.
Eli Lilly and Co (NYSE:LLY) also joined in with mass pharma layoffs over 2017, amounting to a cut of about eight percent of its global workforce. The company employs about 41,240 people. About 2,000 of the 3,500 affected in the latest round of cuts were in the U.S. The company was under the gun, as a number of the its upcoming patents were set to expire, leaving them vulnerable to generic brand competition.
Alexion Pharmaceutical, Inc. (NASDAQ:ALXN) cut around 250 employees following the closure of its manufacturing facility in Smithfield, Rhode Island. The slowing demand for one of its drugs was a principal cause of the layoffs.
Endo International plc (NASDAQ:ENDP) similarly shut down a manufacturing facility, leading to hundreds of job cuts. These layoffs closed down the site in Huntsville, Alabama, leading to about 875 people losing their jobs. Declining sales due to generic drugs were again cited as a driver for the cuts in an effort to reduce costs.
Teva Pharmaceutical Industries Limited (TLV:TEVA) registered one of the largest sets of 2017 layoffs, with 7,000 job cuts announced as it planned to close 15 manufacturing sites. The company had a very disappointing second quarter, brought on once again by fierce competition from generic brands.
“Another round of major layoffs reported at Mylan,” MetroNews, November 10, 2017.