HAYWARD, Calif.--(BUSINESS WIRE)--
Impax Laboratories, Inc. (NASDAQ: IPXL) today announced a reduction in
its workforce as a part of the Company’s efforts to streamline its
operations in response to the need to reduce expenses and adapt to
changing market conditions. The reduction primarily affected
manufacturing operations and is intended to reduce Impax’s cost
structure and scale the organization appropriately for its current needs.
The action resulted in a reduction of approximately 110 positions, with
the majority at the Hayward, California manufacturing facility.
"This reduction in our workforce was a difficult decision, but necessary
to position Impax for a brighter future. We recognize that our plans
will have a significant impact on many of our dedicated colleagues. We
remain grateful for their significant contributions and commitment over
the years and have established severance and outplacement assistance for
those employees affected by this action," said Dr. Larry Hsu, Impax
Laboratories president and chief executive officer.
Dr. Hsu continued, "We remain committed to advancing our generic and
brand business pipelines and growth strategy. To succeed, we must
decrease our costs while efficiently advancing our strategic growth
priorities in both our generic and brand businesses. These steps ensure
the availability of sufficient investment capital to fund these
priorities.”
The reductions became necessary as a result of lower production volumes
at the Hayward facility due to the transfer of products to the Company’s
more cost efficient Taiwan plant, previously announced product
discontinuances and delayed product launches. The Company expects the
reduction in both personnel and other variable expenses, including the
product discontinuances, to yield an annual cost savings of
approximately $15.0 million. The Company expects the total savings
within cost of goods sold in 2013 from these actions to be approximately
$10.0 million.
The Company will also reduce its contracted brand sales force from 84 to
64 positions, as well as four regional sales management positions. This
short-term action is due to the delay in approval for RYTARYTM
and is expected to result in a reduction of the Company’s selling
expenses of approximately $2.0 million in 2013. The Company remains
committed to receiving RYTARY approval and expects to expand its sales
force to the appropriate level following regulatory approval of RYTARY.
The Company expects the reduction in workforce to result in a charge of
approximately $2.4 million in the second quarter 2013.
The expected savings in cost of goods sold and selling expenses in 2013
have no impact on the Company’s 2013 financial guidance for gross margin
as a percentage of revenues and SG&A expenses (selling, general and
administrative) that was updated on May 1, 2013.
About Impax Laboratories, Inc.
Impax Laboratories, Inc. (Impax) is a technology based specialty
pharmaceutical company applying its formulation expertise and drug
delivery technology to the development of controlled-release and
specialty generics in addition to the development of central nervous
system disorder branded products. Impax markets its generic products
through its Global Pharmaceuticals division and markets its branded
products through the Impax Pharmaceuticals division. Additionally, where
strategically appropriate, Impax develops marketing partnerships to
fully leverage its technology platform and pursues partnership
opportunities that offer alternative dosage form technologies, such as
injectables, nasal sprays, inhalers, patches, creams and ointments. For
more information, please visit the Company's Web site at: www.impaxlabs.com.
“Safe Harbor” statement under the Private Securities Litigation
Reform Act of 1995:
To the extent any statements made in this news release contain
information that is not historical, these statements are forward-looking
in nature and express the beliefs and expectations of management. Such
statements are based on current expectations and involve a number of
known and unknown risks and uncertainties that could cause the Company’s
future results, performance or achievements to differ significantly from
the results, performance or achievements expressed or implied by such
forward-looking statements. Such risks and uncertainties include, but
are not limited to, the effect of current economic conditions on the
Company’s industry, business, financial position and results of
operations, fluctuations in revenues and operating income, the Company’s
ability to promptly correct the issues raised in the warning letter and
Form 483 observations received from the FDA, the Company’s ability to
successfully develop and commercialize pharmaceutical products in a
timely manner, reductions or loss of business with any significant
customer, the impact of consolidation of the Company’s customer base,
the impact of competition, the Company’s ability to sustain
profitability and positive cash flows, any delays or unanticipated
expenses in connection with the operation of the Company’s Taiwan
facility, the effect of foreign economic, political, legal and other
risks on the Company’s operations abroad, the uncertainty of patent
litigation, the increased government scrutiny on the Company’s
agreements with brand pharmaceutical companies, consumer acceptance and
demand for new pharmaceutical products, the impact of market perceptions
of the Company and the safety and quality of the Company’s products, the
difficulty of predicting FDA filings and approvals, the Company’s
ability to achieve returns on its investments in research and
development activities, the Company’s inexperience in conducting
clinical trials and submitting new drug applications, the Company’s
ability to successfully conduct clinical trials, the Company’s reliance
on third parties to conduct clinical trials and testing, impact of
illegal distribution and sale by third parties of counterfeits or stolen
products, the availability of raw materials and impact of interruptions
in the Company’s supply chain, the use of controlled substances in the
Company’s products, disruptions or failures in the Company’s information
technology systems and network infrastructure, the Company’s reliance on
alliance and collaboration agreements, the Company’s dependence on
certain employees, the Company’s ability to comply with legal and
regulatory requirements governing the healthcare industry, the
regulatory environment, the Company’s ability to protect its
intellectual property, exposure to product liability claims, changes in
tax regulations, the Company’s ability to manage growth, including
through potential acquisitions, the restrictions imposed by the
Company’s credit facility, uncertainties involved in the preparation of
the Company’s financial statements, the Company’s ability to maintain an
effective system of internal control over financial reporting, the
effect of terrorist attacks on the Company’s business, the location of
the Company’s manufacturing and research and development facilities near
earthquake fault lines and other risks described in the Company’s
periodic reports filed with the Securities and Exchange
Commission. Forward-looking statements speak only as to the date on
which they are made, and the Company undertakes no obligation to update
publicly or revise any forward-looking statement, regardless of whether
new information becomes available, future developments occur or
otherwise.
Source: Impax Laboratories, Inc.