Sumitomo Pharma mulls job cuts in Japan

Sumitomo Pharma’s new president, Toru Kimura, is exploring job cuts in Japan as the company grapples with declining revenue. This news comes after a significant reduction in the company’s US workforce.

The company previously slashed its US workforce from 2,200 employees to 1,200 in the year ended March 2024. Now, Kimura is considering similar measures in Japan, where the company employs around 3,000 workers.

While he did not provide specific numbers, Kimura indicated the Japanese cuts would likely be “in the hundreds” and implemented as soon as this fiscal year.

The company is facing financial challenges after losing exclusivity rights for its schizophrenia drug, Latuda, in the US market. This led to a significant net loss of 314.9 billion yen ($1.97 billion) in fiscal 2023, with revenue declining by 43 per cent compared to 2022.

Sumitomo Pharma is also taking other cost-cutting steps, including scaling back research and development efforts. Kimura acknowledges the need for further measures such as offering early retirement programmes for employees.

The company aims to return to profitability on a net basis in fiscal 2025. To achieve this goal, Kimura announced plans to “sell what assets we can to slim down our operations.”

These assets could include overseas drug sales operations and rights to Latuda and other treatments no longer protected by patents. Sumitomo Chemical, the parent company, is also exploring partnerships for financial support or collaboration on drug development.

Attribution: The Nikkei Asia