M&A activity had a huge impact on medtech job numbers in 2014, while big biotech groups surged ahead, firmly establishing their spot as the most efficient businesses in biopharma. These are the conclusions of the new pharma and medtech job reports published by EP Vantage, editorial arm of the life science market intelligence firm Evaluate Ltd.
Gilead Sciences, Celgene and Shire are leading in pharma sales generated per employee, the pharma report shows. Not only that, but Gilead ranks among the top 10 midcap hirers of the past five years. The data in the reports are based on an analysis of companies’ annual reports. The pharma report finds that:
- Gilead stands way ahead of the competition, with each of its 7000 full-time employees accounting for the generation of a massive $3.5 million of 2014 revenue
- Merck & Co. significantly cut back its headcount, by 8% or roughly 7400 employees, which probably shows the effects of a plan implemented in late 2013 to lay off 20% of its staff
- Actavis, Valeant, Mylan and Teva Pharmaceutical Industries stand among midcap pharma’s biggest hirers, largely reflecting the numerical addition of staff through M&A transactions.
“Specialty players bulking up through M&A remains a trend, though it is unclear how many of these companies’ new employees will survive post-takeover rationalization,” said Lisa Urquhart, Editor of EP Vantage. “It could also be argued that the likes of Gilead and Celgene have less diversified portfolios than big pharma, which puts their employment efficiency at risk if revenues slip.”
As for the medtech industry, Medtronic is now by far the largest company in terms of headcount, with more than 90,000 on the payroll at the end of its 2014 fiscal year. Even though companies will typically reduce headcount after a merger closes, the number of Medtronic employees grew by 43,000 or 88% from 2013 to 2014. Among the medtech report key findings:
- Smith & Nephew’s 22% expansion in its staffing levels is largely due to its $1.5 billion purchase of sports medicine specialist ArthroCare, which added around 1800 jobs
- Exact Sciences saw a 131% boost in employee numbers making it the top headcount increaser by percentage during the past year
- Alere, once one of the more acquisitive medtech companies, shed 7,800 positions in 2014 mostly through divestments, making it the top headcount reducer by number of staff in 2014.
“Not one of the top 15 medtech companies by market capitalization saw a net decrease in staff numbers during the last year,” said Elizabeth Cairns, one of the authors of the report. “It could be that the economic upturn in the US is making medtech companies more confident of growing sales and they are hiring accordingly.”
The pharma jobs report, entitled “Mid-tier players make the most efficient employers,” can be downloaded here.
The medtech jobs report, entitled “Fewer, but bigger: medtech jobs jump thanks to mergers,” can be downloaded here.