BRISTOL, Tenn. (AP) -- King Pharmaceuticals Inc., which last month lost patent protection on its best-selling drug, said Tuesday it will slash 22 percent of its jobs to reduce expenses.
King will eliminate 520 jobs, including 380 sales positions and 140 corporate jobs, as part of a restructuring of its business. An additional 240 corporate posts will be cut as part of King's combination with Alpharma Inc., a former rival King bought at the end of 2008.
The pain drug maker said the moves will lead to one-time charges of $50 million to $55 million in the first half of the year. It did not estimate the savings that will come from the job cuts, but said it will provide more detail on Feb. 26, when it makes its quarterly report.
In a note to clients, Cowen and Co. analyst Ian Sanderson said the job cuts should save about $110 million to $120 million per year for King.
The reduction to King's sales staff will leave it with about 720 sales representatives to market its branded drugs.
In January, a U.S. District Court issued a ruling that overturned two of the three patents that protect King's drug Skelaxin, a muscle relaxant, from generic competition. The company said it plans to appeal the judgment after it is formally entered.
King reported $333 million in Skelaxin revenue in the first nine months of 2008, or about one-fourth of its total revenue for that period.
King is partnering with Corepharma to make an authorized generic version of Skelaxin, which could help it retain some of the revenue from the drug.
In morning trading, King shares edged up 5 cents to $8.68.