Cost savings for 2009 are expected to be $190 million.
Sepracor decided to reduce its workforce by approximately 20%, or about 530 employees: 180 corporate positions and approximately 350 field-based positions. Additionally, it will eliminate roughly 410 contract sales organization sales representative positions, bringing the number of sales-related employees down to 1,325. Sepracor expects to record one-time restructuring charges of approximately $20 million to $23 million in the first quarter of 2009.
With these reductions and other anticipated cost-saving initiatives, Sepracor projects a $210 million reduction in operating expenses. The firm says that about $20 million was realized during the fourth quarter of 2008 and the rest is expected in 2009.
Sepracor says that it will transition into a more customer-focused commercial model. This includes streamlining the structure of the sales force organization and forming business units with geographically tailored field teams that have a regional profitability focus and sole territory product ownership.
“This is a challenging economic time for the country and the pharmaceutical industry, and it has become necessary for us to proactively adapt to these changes so that we can continue to be competitive in this rapidly changing environment,” says Adrian Adams, president and CEO.
“We believe that the plan announced today is necessary and the right course of action to streamline our operations into a more efficient and flexible business that will be better positioned to leverage our product franchises, advance our exciting research and development pipeline, and allow us to continue to pursue synergistic corporate development and licensing opportunities.”