Auxilium Pharmaceuticals, Inc. Announces Corporate Restructuring Designed To Streamline Operations, Cutting 30% Of Jobs
Auxilium Pharmaceuticals, Inc. (NASDAQ: AUXL), a specialty biopharmaceutical company, today announced steps it is taking to reduce its costs and more fully support the Company's goal to drive earnings growth and build shareholder value. These steps are being launched after a comprehensive assessment of Auxilium's broadened product portfolio and current cost structure and what management believes to be Auxilium's growth assets, commercial strengths, opportunities and challenges and the Company's manufacturing needs and capabilities. The restructuring is designed to:
Reduce annual operating expenses by at least $75 million and align cost structure with the Company's current product portfolio
Stabilize cash flow and improve leverage ratio
Realign the commercial organization and strategically consolidate the current three sales forces into two sales forces, strengthening the Company's urologist franchise offering while maintaining the momentum for the XIAFLEX® for Peyronie's Disease and STENDRA® launches and supporting the growth potential of TESTOPEL® and edex®
Maintain the targeted commercial resources dedicated to continuing the stable growth momentum of XIAFLEX for Dupuytren's contracture
Focus R&D efforts on the efficient development of near-term value programs – cellulite and Frozen Shoulder Syndrome
Improve manufacturing efficiency and enhance inventory management
"We believe the changes announced today support our corporate growth strategy and enhance and accelerate our ability to achieve our goal of building Auxilium into a leading, diversified North American specialty biopharmaceutical company," said Adrian Adams, Chief Executive Officer and President of Auxilium Pharmaceuticals. "Auxilium has faced significant challenges this year, in particular a dramatic decline in the testosterone replacement therapy market. We are making difficult but necessary changes at the operational level to strengthen our balance sheet, reinforce our competitive position and, we believe, drive shareholder value. We are confident that these steps will make us a leaner, more efficient and more competitive company and, after our anticipated merger with Canadian biotechnology company QLT, Inc., will provide a stronger platform to accelerate our growth and transformation."
Auxilium has identified annual cost savings totaling greater than $75 million, which includes reducing headcount by approximately 30 percent, the majority of which will be immediate, realigning the commercial organization from three into two sales forces, focusing its R&D efforts and expenditures and improving manufacturing efficiency. The Company anticipates substantial completion of the restructuring by the end of 2014, with the full $75 million run-rate achieved by mid-year 2015. In 2014, Auxilium expects to record certain charges totaling up to $20 million associated with the restructuring, primarily resulting from severance and contract-related expenses.
"Finally, we would like to thank all affected and unaffected Auxilium employees for their efforts, dedication and commitment to the Company's growth and success. Each of our departing employees has played an important role in Auxilium's successes and we wish them well in their future endeavors," stated Mr. Adams.
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