Facing the loss of exclusivity on patents, Merck & Co., Inc. (NYSE:MRK) is laying off another 8,500 workers, just a month after the pharmaceutical giant pink-slipped 7,500 employees.
The Whitehouse Station, N.J., company is expected to reduce its global workforce of 81,000 by about 20 percent as it takes on restructuring costs of between $2.5 billion and $3 billion, including $900 million to $1.1 billion in 2013, a majority of which will be recorded in the third quarter. The company hopes to save about $2.5 billion a year by the end of 2015.
Merck, like many of its rivals, has been losing exclusive patents on a number of drugs since the so-called “patent cliff” of 2012. Analysts told International Business Times even more licenses are expected to expire in 2015.
For Merck, the real damage came with the recent loss of a patent on its allergy and asthma drug Singulair, which has already been a drag on revenue.
Gone are the TV commercials that appeared throughout the mid-2000s, urging allergy sufferers to ask their doctors about Singulair. Gone, too, are the funds for expanded research into something new to replace it.
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Merck is cutting staff from the marketing department and from research and development.
The company also took a hit when its animal-feed additive, Zilmax, was linked to leg weakness in cattle. Several livestock-trading bodies banned cows fed the drug last month.