- After a tough first quarter, Endo International said it will accelerate a restructuring of its manufacturing network, closing a plant in North Carolina and cutting jobs in a second site in Alabama. Overall, about 740 jobs will be impacted by the move.
- The company expects the cutbacks will be completed by fall 2017 and save $60 million in annual costs.
- While acquisitions of Par Pharmaceutical and Auxilium last year boosted total product revenue, Endo posted a net loss of $89 million in the first quarter and pared its guidance for annual revenues. Markets reacted sharply on the news, dropping Endo stock by nearly 40% last Friday.
On an investor call, Par CEO Paul Campanelli indicated the restructuring was aimed to prioritizing higher-value assets, and would lead to 60 product discontinuations.
The jobs cuts associated with the new strategy are significant however. Closing the Charlotte, North Carolina site will impact the 390 employees working there, while roughly 350 jobs will be affected at the Huntsville, Alabama facility, according to Fierce Pharma.
"For Endo, the Par management team, and for me personally, this is both an extremely and disappointing to our company," Campanelli said.
Profits were hurt by generic competition for Endo's Voltaren Gel and "greater than expected price erosion across the generics sector," according to Endo chief Rajiv De Silva.
Endo has been hurt by some of the same market pressures affecting Valeant, Mallinckrodt, and Horizon Pharma. Lumped together as so-called specialty pharma companies, all four have seen significant market sell-offs this year.
Like Valeant, Endo has been aggressive in pursuing acquisitions and has a relatively lean R&D budget. It also has high net debt of roughly $8.6 billion.