Healthcare Industry News: Strativa Pharmaceuticals
News Release - October 14, 2008
Par Pharmaceutical Announces Resizing of Generic Unit to Optimize Strong First-to-File Pipeline
Reduces Workforce by Approximately 190Anticipates Annualized Cost Savings of $45-$55 Million
WOODCLIFF LAKE, N.J., Oct. 14 (Healthcare Sales & Marketing Network) -- Par Pharmaceutical Companies, Inc. (NYSE: PRX ) today announced a resizing of its generic unit as part of an ongoing strategic assessment of its businesses. This initiative will enable Par to more effectively optimize its current product portfolio and its strong pipeline of first-to-file/first-to-market products. As a result, the Company believes it will be better positioned to compete more profitably and efficiently in the generic marketplace over the long term.
Par will significantly reduce its research and development (R&D) expenses by decreasing its internal R&D effort to focus on completing products currently in development and will continue to look for opportunities with external partners.
The Company will trim its current generic product portfolio retaining only those marketed products that deliver acceptable profit to Par.
Patrick G. LePore, Par's chairman, chief executive officer and president states, "After careful examination of Par's businesses, we concluded that to improve profitability, we needed to align the Company's cost structure with the size of its operations and development pipeline." Mr. LePore continued, "Over the past several years, Par's generic R&D investment has yielded the Company a very promising pipeline of current and future products. Those assets combined with a smaller, more profitable base business should generate significant cash over the next several years, improving Par's ability to accelerate its investment in Strativa Pharmaceuticals."
These actions will result in a workforce reduction of approximately 190. Approximately 30% of the affected positions in manufacturing, R&D, and general and administrative will be eliminated by year-end 2008 and the remaining positions by the end of first half of 2009.
Total expenses associated with these actions are expected to be in the range of $28-$38 million, including non-cash charges in the range of $20-$28 million. The Company anticipates these actions will generate operating expense savings on an annualized basis in the range of $45-$55 million.
About Par
Par Pharmaceutical Companies, Inc. develops, manufactures and markets generic drugs and innovative branded pharmaceuticals for specialty markets. For press release and other company information, visit www.parpharm.com.
Safe Harbor Statement
Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent any statements made in this news release contain information that is not historical, these statements are essentially forward-looking and, as such, are subject to known and unknown risks, uncertainties and contingencies, many of which are beyond the control of the Company, which could cause actual results and outcomes to differ materially from those expressed herein. Risk factors that might affect such forward-looking statements include those set forth in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2007, in Item 1A of the Company's subsequent Quarterly Reports on Form 10-Q, in other of the Company's filings with the SEC from time to time, including Current Reports on Form 8-K, and on general industry and economic conditions. Any forward-looking statements included in this news release are made as of the date hereof only, based on information available to the Company as of the date hereof, and, subject to any applicable law to the contrary, the Company assumes no obligation to update any forward-looking statements.
Source: Par Pharmaceutical
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