Pharma Stocks: Emerging Brainpower Shift

With all the restructuring and strategic scrambling over the past several years, one could be forgiven for thinking that the pharmaceutical industry has drastically reduced its headcount. After all, government payers have become tougher to convince when pitching the merits of a new drug and, of course, the patent cliff has sapped revenue from brand-name drugmakers as low-cost generics have arrived. Industry revenue shrinkage seen here:

PFE Revenue TTM Chart

PFE Revenue TTM data by YCharts

A new analysis, however, suggests the recent reality is slightly more nuanced. The total job loss amounted to 4 percent – or a decline in total headcount of approximately 36,000 positions - between 2007 and 2012 among the world’s 11 biggest drugmakers, according to EP Vantage. Besides acquisitions, ongoing expansion in so-called emerging markets offset many of the cuts.

Of course, numbers vary among drugmakers. For instance, Novartis (NVS) headcount jumped 30 percent during this period, to more than 127,700, thanks in part to its acquisition of Alcon, although in the US, 31 percent of its jobs were shed. Overall, AstraZeneca (AZN) employment dropped by 23 percent amid several rounds of cutbacks, while Bristol-Myers Squibb (BMY) lopped off 33 percent, mostly in 2007 and 2008.

Not surprisingly, job growth has been robust among a second tier of drugmakers that have market capitalizations of $30 billion. With the exception of Amgen (AMGN), which mimics big pharma with an aging franchise and subsequent job cuts, several familiar names have greatly boosted employment – Celgene (CELG), Novo Nordisk (NVO), Biogen Idec (BIIB) and Gilead Sciences (GILD). Overall, this group added more than 41,000 jobs during the same period. Growth is seen here:

NVO Revenue TTM Chart

NVO Revenue TTM data by YCharts

Celgene headcount rose 179 percent during this period, while Gilead employment jumped 68 percent, for instance. Biogen and Novo Nordisk increased headcount by 38 percent and 36 percent, respectively. And Teva Pharmaceuticals (TEVA) employment rose 65 percent, although as EP Vantage points out, this increase largely reflected acquisitions.

To read the remainder of this article, go to Pharmalot.

Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at You can also request a demonstration of YCharts Platinum.



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