Oscient Pharmaceuticals Corporation announced a strategic realignment of its commercial organization to more aggressively preserve the company's financial resources, while retaining coverage of those physicians with potential to generate the highest volume of prescriptions. In addition, Oscient has engaged Broadpoint Capital, Inc. to advise the company on strategic options, including the potential sale of the company.
As a result of this restructuring, Oscient will implement a workforce reduction of approximately 32 per cent of its 305 employees across the United States. Employees affected by the restructuring will be offered severance benefits. The company is also eliminating approximately 25 positions which have been vacant. Following the staff reductions, the company will have approximately 35 employees at its offices in Waltham, MA and Skillman, NJ; and approximately 170 field employees across the United States.
"Given current capital market constraints and our limited cash resources, we determined that the best way to position our organization for a potential partnership or acquisition was to take the difficult steps to realign our commercial organization and reduce cash required for operations," said Steven M. Rauscher, president and CEO of Oscient Pharmaceuticals. "We appreciate the many contributions of those employees impacted, and will work to ease their transitions."
Oscient expects that the cumulative impact of these decisions will reduce current annualized payroll expenses by approximately $8 million. The company expects to record a restructuring charge of approximately $2 million in the first quarter of 2009, primarily representing cash payments for severance expenses, the majority of which will be paid in the first and second quarters. Additional financial details may be provided when 2008 financial results are announced in March 2009.
"We have taken significant measures to decrease current expenditures, including a reduction of cash interest payments on our long-term debt, a reduction in operating expenditures, and the elimination of cash bonus payments to officers and office personnel," added Rauscher. "During this period of economic uncertainty, the pharmaceutical industry has experienced a slowing in the growth of branded pharmaceutical products, a trend which began in 2008. Even with recent steps to extend debt maturities and reduce the company's overall indebtedness by more than $125 million, we believe it is necessary and prudent to take the additional steps announced today."
Oscient Pharmaceuticals Corporation is a commercial-stage pharmaceutical company marketing two FDA-approved products in the United States: Antara (fenofibrate) capsules, a cardiovascular product and Factive (gemifloxacin mesylate) tablets, a fluoroquinolone antibiotic.