Merck & Co. said Monday it will cut 1,200 U.S. sales jobs in an attempt to save expenses amid the recent rejection of its Cordaptive cholesterol drug last week.
The number of cuts represents 15 percent of Merck's US sales force of 8,500 at the beginning of 2007. Affected employees will be notified by the end of May and they will leave by the end of July with benefits and other assistance, the company said in a statement.
The recent cuts are part of our previously disclosed, continuing efforts to optimize our cost base and improve Merck's effectiveness and efficiency across all aspects of our business,'' said the president of Global Human Health at Merck, Kenneth Frazier. We decided to accelerate the achievement of efficiencies we anticipate gaining as we transition to our new commercial model in the United States, he added.
According to Amy Rose, a spokeswoman for the pharmaceutical firm, the job cuts are part of a global restructuring plan announced it late 2005 meant to generate savings of $4.5 billion to $5 billion through 2010. Since 2005 Merck has cut 7,200 jobs , regulatory filings note.
Last Monday the U.S. Food and Drug Administration sent a non approval letter to Merck regarding Cordaptive its new drug for cholesterol designed to raise the level of HDL or good cholesterol. The rejection was a surprise for analysts who later expect the approval could be delayed up to 5 years or more including the possibility of a failure.
Several investors were watching closely the approval of Cordaptive to become a best-seller product that could compensate previous disappointing sales of other cholesterol drugs made by the company.
Shares of Merck & Co. rose slightly 0.31 percent to $39.10 on after hours trading at the New York Stock Exchange today.