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UCB SA, the Belgian drugmaker that bought Schwarz Pharma AG, is cutting 2,000 jobs, or 17% of its staff, to spur profit growth and reduce administrative costs.

The move is part of an effort to redirect 300 million euros ($444 million) of funds into research on medicines for the central nervous system and immunology, Brussels-based UCB said. UCB faces eroding sales as patents on its two biggest products, the Zyrtec antihistamine and Keppra treatment for epilepsy, expire. The Belgian company aims to bridge the gap by expanding revenue from new medicines such as Vimpat, the epilepsy drug set to go on sale in Britain and Germany, and by focusing on higher-margin specialty products. Reducing the workforce will allow UCB to reap long-term savings, said Jan van den Bossche, who follows UCB at Petercam SA in Brussels. "Cutting costs from staff, or cutting your administration or bureaucracy is a structural contributor to growth," he said.

UCB said Aug. 1 it would reduce expenses to ensure that 2009 earnings will be at least as high as in 2008. UCB shares have declined 15% this year after the company recalled batches of its Neupro patch for Parkinson's disease and encountered generic competition for Zyrtec. The Belgian company has gained new medicines by acquiring the companies that make them. UCB got Vimpat after paying about 3.4 billion euros to acquire Schwarz in 2006. Its purchase of Celltech Group Plc in 2004 brought it Cimzia, a Crohn's disease treatment that won approval from U.S. regulators in April.
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Article Type:Brief article
Date:Sep 1, 2008
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