Schering AG reveals new business model for its Jenapharm subsidiary

Berlin, Germany-based pharmaceutical firm Schering AG has announced a new business model for its subsidiary Jenapharm including setting up a new unit. Marketing and distribution activities in the fields of gynecology and andrology are to be continued in an independent subsidiary. The plan is for this company to begin its business activities under the name of Jenapharm by January 1, 2007, with the aim of further strengthening both the company's market position and the "Jenapharm" brand name, the parent firm said.

In the course of this restructuring measure, Jenapharm's present research arm will be integrated into Schering's R&D organization in Berlin; development activities will be scaled down and administrative functions adapted. A management buy-out will be sought for the active ingredient plant on the Jena factory site. The present company, Jenapharm GmbH & Co KG, is to take over location management in Jena.

The planned implementation of the new business model is likely to involve the loss of 65-120 jobs. Discussions with the employees' representatives on the preparation of a reconciliation-of-interests scheme and a social compensation plan will begin shortly, the firm said. The measures are part of Schering's FOCUS Initiative (Marketletters passim), a comprehensive review of the company's strategic orientation, operational business procedures and organizational structure aimed at achieving a long-term increase in growth profitability.