Changes at King Pharma

Source: Healthcare Digital

Date :10/19/2007 5:24:17 AM

King Pharmaceuticals Inc, has announced it is to cut around 520 jobs and is planning a strategic shift to reduce other expenses.

The move follows last month’s U.S. Court of Appeals ruling against the continued validity of the patent covering King’s blood pressure treatment Altace.

As King’s biggest product, Altace accounts for roughly 35 percent of revenue, with sales of $163 million in the second quarter.

Measures

King said it expects to take a one-time charge of about $70 million during 2007 related to the restructuring announced Thursday however the Bristol, Tennessee-based drug maker said it expects to save $75 million to $90 million in 2008 as a result.

"We believe the expense reduction measures announced today will enable us to continue generating strong cash flow to invest in our pipeline and business development opportunities," Chief Financial Officer Joseph Squicciarino said in a statement.

King’s shares have dropped almost 50 percent since hitting $21 in mid-July following concern about patent challenges to Altace and the muscle relaxer Skelaxin.

October 19 2007

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