Pierre Fabre Laboratories, a pharmaceutical company headquartered in France, has announced plans to reduce staff by 551 positions to address weak performance in its pharmaceutical business. The company said its restructuring plan, called Trajectory 2018, will seek improved returns in its pharmaceutical business by targeting its therapeutic focus and growing through acquisitions as the company continues to grow its dermo-cosmetics business. 

The company said it was making the changes as a result of declining revenues in its pharmaceutical business. Since 2009, the revenue generated by the the company’s Pharmaceuticals Division in France for ethical drugs (excluding oncology) has decreased by EUR 100 million ($123.9 million). The company cited issues endemic to the industry as a whole and specific to its business: declining R&D productivity, price reductions for mature drugs, and generic-drug incursion as reasons for the revenue decline. The company’s dermo-cosmetics business represents 55% of the company’s sales, and the company said it operates in a sustained way unlike its pharmaceuticals business, which has had weaker performance.

The company plans to focus its R&D in ethical medicines led by a new organization structured around three innovative units (oncology, neuropsychiatry, and dermatology) based on three platforms (new biotechnology entities, new chemical entities, and clinical development). In addition, a fourth innovation unit will focus on consumer healthcare.

The implementation of the proposed new drug innovation model will result in a workforce reduction of R&D that would remain, however, focused in operations in France in the Midi-Pyrenees region (Toulouse-Oncopole, Castres, and Gaillac) and Haute-Savoie (Saint-Julien-en -Genevois). The number of positions  will be reduced from 948 to 653 by 2016, resulting in a staff reduction of 272 people (including 255 positions in France). In its sales, the company plans to reduce the number of positions from 928 to 547 by 2016, resulting in a reduction of 279 positions. Pierre Fabre said it intends to offer professional retraining and redeployment of staff as a way to minimize the staff reductions.

Source: Pierre Fabre