The company said the personnel changes and other cuts will bring the company's pharmaceuticals division approximately $173 million (€129m) in savings by 2006, the company said in a statement. Approximately 110 jobs in the US and 440 at its headquarters in Wuppertal, Germany, will be affected, it noted.
The restructuring comes as part of a program instituted in 2001 - after the company had to withdraw its cholesterol-lowering drug Lipobay/Baycol (cerivastatin) from the market - that aims to reduce Bayer's overall cost base by $1.34 billion by 2006.
Bayer had to pay out significant damages after the withdrawal, which caused it to suffer shrinking sales and hefty losses, exacerbated by the loss of patent protection for its leading antibiotic Cipro (ciprofloxacin) in the US. In the third quarter, Cipro revenues plummeted 55 per cent to €149 million , while also coming in well below expectations was the firm's recently launched erectile dysfunction drug Levitra (vardenafil) - partnered with GlaxoSmithKline - which saw third-quarter sales plunge 49 per cent to €45 million.Overall, the firm's drug unit recorded an 8.4 per cent drop in sales to €2.1 billion.
After a flirtation with spinning out the pharma business - since abandoned - Bayer is now undergoing an equally radical transformation, with the chemicals business set to be spun out into a new entity (Lanxess) next year.
The German group also said it plans to refocus its pharmaceuticals unit in the fields of cancer and cardiovascular and spin off its anti-infective and urological research. Bayer has just three drug candidates in advanced clinical testing and industry analysts said that eliminating some therapy areas will allow a heavier investment in the retained R&D projects.
The one-time costs relating to the job cuts and other restructuring will depend on the exact measures taken, which have not yet been agreed on with employee representatives.
The move follows Bayer's announcement earlier this month of job cuts at its pharmaceuticals site in West Haven, US, due to a strategic sales and marketing alliance with US firm Schering-Plough.