Allergan is turning to job cuts and restructuring to increase shareholder value as it continues to battle a hostile takeover attempt.
The Irvine, CA–based company—best known for the drug Botox, but also a maker of silicone breast implants and tissue expanders—announced Monday it will cut 1500 jobs and close three U.S. locations
The cuts, which constitute 13% of Allergan’s global workforce, will mean closure of company properties in Santa Barbara, CA, Carlsbad, CA, and Medford, MA., according to a letter to employees included with Allergan's second quarter earnings report.
In the earnings report news release, Allergan also said that it will not fill 250 vacant positions.
The restructuring that led to the cutbacks could save Allergan $475 million in 2015. It comes amid a contentious takeover attempt by Canada’s Valeant Pharmaceuticals. Allergan, based in Irvine, Calif., has rebuffed its suitor, calling its offers undervalued.
Valeant returned the volley this week, telling the SEC and Canadian regulatory authorities that Allergan made false and misleading statements to dissuade shareholders from accepting Valeant’s purchase offer. Allergan has accused Valeant in regulatory filings of mismanaging Bausch + Lomb, which Valeant acquired for $9 billion in May 2013.
Most Allergan customer-service workers will be spared, the company said. Clinic-based R&D pharmaceutical research and development programs will continue, and reductions in discovery programs will not affect product approvals within the next year, the company said.
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Allergan, meanwhile, reported a16.7 percent increase in revenues and a 15.9 percent jump in earnings for its second quarter ended June 30. Adjusted per-share earnings came in at $1.51, beating analysts' estimates as well as Allergan's own projections.
The takeover attempt has helped make Allergan's stock one of the fastest growing in value among major medical device company stocks so far this year, up more than 54% percent in value to around $170 per share as of Monday.
Nancy Crotti is a contributor to Qmed and MPMN.
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