Abbott to cut 1,900 jobs in restructuring

[somone]

http://chicagobreakingbusiness.com/2011/01/abbott-4q-profit-dips-on-restructuring-acquisitions.html

Abbott to cut 1,900 jobs in restructuring
By Bruce Japsen

Abbott Laboratories today said it would cut 1,900 jobs, or 6 percent, of its U.S. workforce in the wake of a series of disappointments in its drug development pipeline, triggering the need to restructure pharmaceutical commercial and manufacturing operations.

The North Chicago-based drug giant last week, for example, said it would hold off seeking U.S. approval of an experimental psoriasis drug treatment following feedback from federal regulators who have concerns about the drug’s safety. Abbott has not disclosed the issues with the drugs but analysts and studies have indicated potential risks to the heart.

In addition, Abbott has been unable to bring other treatments to market. In December, decided to stop developing the cholesterol drug Certriad, a pill that combines drugs already on the market.

Abbott blamed today’s decision to cut jobs on “the challenging regulatory environment.” The company said costs of the “cost reduction initiative” would be nearly $300 million over the next several year...

[katnapped]

1. Ah yes "the challenging regulatory environment"

Translated: "Why won't you let us kill more people?!?!?"

[pampango]

2. CEO: "the environment in the wake of the overhaul (HCR) would also contribute to challenges".

Though the pharmaceutical industry was a critical supporter of U.S. health reform legislation signed into law last year, White complained that the environment in the wake of the overhaul would also contribute to challenges. Such pressures, analysts say, include health plans watching their expenses more closely and being unwilling to approve drugs and medical products that offer patients little benefit yet are priced higher than older cheaper medications.

Abbott said fourth-quarter 2010 profits dipped 6 percent thanks in part to costs of restructuring and integrating recent acquisitions. The company said earnings fell to $1.4 billion, of 92 cents a share in the fourth quarter last year, compared to $1.5 billion, or 98 cents a year earlier.

Abbott attributed the dip to costs related to a “restructuring of its U.S. pharmaceutical business to streamline commercial and manufacturing operations.” In addition, the company had expenses related to its integration of its acquisition last year of Solvay Pharmaceuticals.

Excluding such items, which the company accounted for as after-tax charges of $346 million, or 23 cents a share, Abbott said profits would have risen nearly 10 percent in the fourth quarter, to $2 billion.

So profits would have been higher except for its internal "restructuring" and expenses caused by the purchase of another company. Sure sounds like "the challenging regulatory environment" had little to do with it other than being a good partisan whipping boy.