This initiative will enable Par to more effectively optimize its current product portfolio and its 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 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.
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 the end of 2008 and the remaining positions by the end of the 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.
Patrick LePore, Par’s chairman, CEO and president, said: “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.
“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.”