King Pharmaceuticals has begun restructuring and work force reduction initiatives to decrease its operating expenses, which will result a total work force constriction of approximately 22 percent, or approximately 760 positions, in combination with a decrease in headcount arising from its acquisition of Alpharma.
Approximately 240 of the reductions are corporate positions associated with synergies from the Alpharma acquisition, according to the Bristol, Tenn.-based company. About 520 of the reductions are associated with the restructuring of which approximately 380 are field sales positions and approximately 140 are corporate positions. Following the restructuring, King said its sales force for branded prescription products will total approximately 720.
“Following the recent court decision relating to our [muscle relaxer] Skelaxin 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,” said Brian A. Markison, King’s chairman, president and CEO.
In connection with its restructuring initiatives, the company said it 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. The costs are exclusive of any special charges associated with the company’s activities related to the integration of Alpharma.