King Pharmaceuticals, Inc. announced restructuring and workforce reduction initiatives it is taking to decrease the company's operating expenses. These actions, when combined with the reduction in headcount arising from King's recent acquisition of Alpharma Inc., result in a total workforce reduction of approximately 22 per cent or approximately 760 positions.
Approximately 240 of these reductions are corporate positions associated with synergies from the Alpharma acquisition. Approximately 520 of these reductions are associated with the restructuring announced today, of which approximately 380 are field sales positions and approximately 140 are corporate positions. Following the restructuring, the company's sales force promoting its branded prescription products will total approximately 720.
Brian A. Markison, chairman, president and chief executive officer of King, stated, "Following the recent court decision relating to our Skelaxin (metaxalone) patents and the uncertainty that it creates with respect to the continued exclusivity of the product, we thoroughly assessed our cost structure. We concluded the restructuring measures announced today will better position us to support the near-term priorities of our strategic plan."
In connection with its restructuring initiatives, the company estimates that it will incur costs resulting in a special charge of between $50 million and $55 million, all of which it expects to incur in the first half of 2009. These costs are exclusive of any special charges associated with the company's activities related to the integration of Alpharma.
The company plans to provide more details with respect to today's announcement during its conference call on February 26, 2009, the date it intends to announce its financial results for the fourth quarter and year ended December 31, 2008.
Recently, the US District Court for the Eastern District of New York issued an Order invalidating United States Patent Nos. 6,407,128 and 6,683,102, two patents relating to Skelaxin. The company plans to appeal upon entry of an appropriate judgment and vigorously enforce its intellectual property rights.
King, headquartered in Bristol, Tennessee, is a vertically integrated branded pharmaceutical company. King, an S&P 500 Index company, seeks to capitalize on opportunities in the pharmaceutical industry through the development, including through in-licensing arrangements and acquisitions, of novel branded prescription pharmaceutical products and technologies that complement the company's focus in specialty-driven markets, particularly neuroscience and hospital.