Abbott Labs cuts 1,200 jobs as drug-coated heart stent market shrinks

Pharma major Abbott Laboratories said on Tuesday 4 December that it will have to lay off about 1,200 workers in California and Ireland, owing to rapidly falling demand in the market for drug-coated heart stents, as well as manufacturing improvements.

The company cut 700 employees from the payroll at its factory in Temecula, California, on Tuesday, reducing the facility''s workforce by about 16 per cent. It also plans to shut its plant in Galway, Ireland, and lay off the roughly 500 employees there. Abbott's Galway layoffs will begin in January and end by the third quarter of 2008.

The news comes less than a week after advisers to the US Food and Drug Administration (FDA) voted to recommend approval of Abbott''s new Xience stent, despite uncertainty about the long-term risk of blood clots. Abbott expects to launch Xience in the US in the first half of 2008. The new stent is widely expected to quickly become a market leader.

Stents are tiny mesh tubes used to prop open heart arteries after they have been cleared of blockages by angioplasty. Newer versions coated with special drugs that inhibit reclogging of the arteries came up starting 2003.

But doctors have been doing fewer angioplasties after the discovery of a rare but serious risk of blood clots developing months, or more than a year, after stents have been placed. As a result, the global market for drug-coated stents has shrunk from about $6 billion to around $5 billion annually.