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Facing patent expiry for one of its top drugs and an overabundance of sales staff due to recent acquisitions, King announced that it would eliminate 760 jobs.
Add King Pharmaceuticals to the list of drug companies shedding staff. The specialty drug manufacturer announced on Tuesday that it was eliminating 760 jobs-totaling 22 percent of its workforce.
The cuts come two weeks after a US District Court judge invalidated two of the three patents on King’s muscle relaxant Skelaxin (metaxalone). (King said it would appeal the decision.) At least three companies are planning to market generic versions of the drug in the near future, including King, which has a joint venture with Corepharma.
Of the positions being eliminated, 240 are related to redundancies brought on by the purchase of Alpharma late last year, another 380 are sales reps, and the rest are corporate positions. That leaves King with just 720 reps to sell its five prescription drugs.
The restructuring plan will cost the company up to $55 million in the first half of 2009. No word on how much King expects to save, but the company promised to explain more during its fourth quarter report presentation on February 26.
Embeda Scores High Marks
On a bright note, King revealed positive Phase III results from a 12-month study of Embeda (morphine/sequestered naltrexone)-the abuse-resistant pain drug it acquired through the Alpharma purchase.
“This clinical study showed that Embeda continued to effectively decrease pain over a period of 12 months in chronic pain patients,” stated Eric Carter, chief science officer of King Pharmaceuticals. “These results, along with earlier safety and efficacy findings, demonstrate that Embeda has the potential to be one of the first formulations designed to deter common methods of misuse and abuse, while safely and effectively treating patients with chronic pain.” The drug combines time-release morphine with a narcotic antagonist formulated so it is only released if the drug is crushed or chewed-common ways to abuse time-release pain meds.
Embeda was a sticking point during the King/Alpharma negotiations. Alpharma CEO Dean J. Mitchell refused King’s earlier proposals claiming that King downplayed potential earnings for Embeda. In the end, King picked up the firm for $1.6 billion.