1,600 job-cuts to pay for R&D overhaul as per AstraZeneca plc (NYSE:AZN)

Northern, WI 03/19/2013 (avauncer) - AstraZeneca plc (NYSE:AZN) ($46.35 Up by 0.37%) CEO Pascal Soriot is on a company revival effort. And 1,200 jobs are on the line. U.K’s second largest drugmaker is all set to spend $1.4 billion costs towards a research and development upheaval. The company said that the research will be concentrated in Cambridge, England, Moelndal, Sweden and Gaithersburg, Maryland and will be shifting its corporate headquarters to Cambridge from London. The plan is build a new facility there, worth $500 million. The jobs that face the cut amount to about 3.1 percent of the Astra workforce which stood at 51,700 at December end.

Improvement is definite

Soriot who became the CEO last year said that research productivity at the company will see an improvement due to the new plan. At that time the company had seen several drug-development setbacks and he had replaced David Brennan. He said that the company is committed to England and that another aim of the reorganization is to bring researchers of the project closer. Some researchers are working on biologicals, which are drugs made from human cells whilst others are working on chemical-based medicines. AstraZeneca plc (NYSE:AZN) had acquired the American biotechnology company MedImmune Inc, in 2007. The current move and this overhaul have been influenced by the latter that used to have a research site in Cambridge.

Restructuring and new acquisitions…

Astra will be putting the plan forward to its employees and holding discussions with them even before its investors and analysts are briefed on March 21, said Soriot. The restructuring costs will involve one time charges of $1.4 billion and $800 million out of this will be cash expenses. These measures are expected to bring the company $190 million worth of cost savings by 2016. In recent years, AstraZeneca plc (NYSE:AZN) had suffered setbacks in the development of new products and 40 percent of Astra sales are accounted to drugs which will be losing their patents by next year-end. Soriot said that a series of bolt-on acquisitions and business deals will complement existing assets. He is now focused on this plan and it is topmost on his priority list.