December 9, 2014 / 4:51 PM / 5 years ago

Drugmaker Pierre Fabre to cut over 500 jobs in France by 2016

PARIS, Dec 9 (Reuters) - French drugmaker Pierre Fabre said on Tuesday it would cut 551 jobs in pharmaceutical research and development (R&D) and sales by 2016, almost exclusively in France, as it focuses on expanding its dermatology and cosmetics division abroad.

Unveiling its strategy to 2018, Pierre Fabre said it aimed to cut costs in pharmaceuticals to be able to build a consumer healthcare franchise and grow its dermo-cosmetics business, particularly in Asia and the United States.

The company, with 6,500 staff in France out of 10,000 worldwide, said it would seek to avoid layoffs by offering affected employees other jobs within or outside the company.

The dermo-cosmetics division accounts for 55 percent of group revenue and the bulk of its profit, whereas the pharmaceuticals division has seen sales fall in France since 2009, hit by deficit-reduction measures that have weighed on drug prices, Pierre Fabre explained in a statement.

Pharmaceutical firms worldwide have sought in recent years to squeeze more out of R&D spending and shrink their sales forces as austerity measures across Europe weigh on drug prices.

Pierre Fabre said it would focus its R&D on oncology, neuropsychiatry and dermatology. It hopes its plan will give it financial firepower to buy new drugs from other companies and fill up its medicine chest.

It said its R&D operations, which will shed 272 jobs in southern France, had been “insufficiently productive” up to now.

The former CEO of top French drugmaker Sanofi, Chris Viehbacher, made the same reproach to his company’s R&D site in Toulouse in 2012, sparking outrage from unions and the government. Sanofi finally agreed last week to hand over the site to German outsourcing firm Evotec.

A spokesman for Pierre Fabre said 534 of the planned job cuts would occur in France and the remainder would result from the closure of an R&D site in Barcelona.

The company, which sells its products in over 130 countries, posted revenue of 2 billion euros in 2013. Its brands include Avene, Klorane, Ducray, Rene Furterer and Drill. (Reporting by Natalie Huet and Noelle Mennella, editing by David Evans)

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