Forest Laboratories has announced a cull of around 500 jobs under a cost-cutting rejuvenation programme striving for savings of $500 million by 2016.
The New York-based group has announced a stream of "significant actions" it claims will help boost competitiveness and enable future growth through acquisitions, as well as return cash to shareholders.
Under the banner Project Rejuvenate, Forest is aiming for a flatter and broader organisation to reduce layers and increase control, to enhance productivity and profitability by re-prioritising and rescaling the cost base, and to streamline work to trim low value activities, it said.
The company is expecting to generate savings of around $270 million from re-jigging research and development, $150 million from a reduction of marketing expenses, and the remaining $80 million from a cut-back in general, administrative and other expenses.
Of the total $500 million, around $110 million will be related to headcount savings, the firm noted.
Salesforce and those with key responsibility for submitting important late-stage R&D programs are excluded from Project Rejuvenate.
This is because Forest's "top priorities are maximising the potential of our launch brands and key products in our portfolio, as well as delivering the late-stage pipeline," said Brent Saunders, Chief Executive Officer and President, who replaced ex CEO Howard Solomon less than three months ago.
Buys US rights to Merck's Saphris
Meanwhile, Forest also announced that it is bagging exclusive US rights to Merck & Co's Saphris (asenapine) sublingual tablets, a treatment for adult patients with schizophrenia or acute bipolar mania.
Under the deal, Forest will hand over to Merck $240 million upfront as well as additional payments based on defined sales milestones.
Merck will retain responsibility for product supply, while Forest will take on continued commercialisation, including completing certain post-marketing studies of Saphris following a transition period, and will be the marketing authorization holder.
Explaining the strategy behind the move, Saunders said Saphris "complements our current position in psychiatry and gives us access to the important schizophrenia segment as we continue to work toward registering and commercialising cariprazine with our partner Gedeon Richter".
"This deal is immediately accretive to Forest's earnings and makes us more relevant to our customers, as well as our current and future business partners in the CNS category," he added.