Valeant Sacks 258 Salix Employees; Confirms "Limited Presence" in North Carolina
April 3, 2015
By Mark Terry, BioSpace.com Breaking News Staff
As Canadian firm Valeant Pharmaceuticals International, Inc. completes its acquisition of Raleigh, N.C.-based Salix Pharmaceuticals and merges its recent acquisition of Seattle-based Dendreon Corporation , the company continues to hack away at jobs.
Salix filed a Worker Adjustment and Retraining Notification (WARN) Tuesday with the state of North Carolina, indicating that it plans to maintain a “limited presence” in Raleigh and would lay off 258 employees. The remaining staffers will be under the supervision of Bill Bertrand, Salix’s general counsel.
“We firmly believe in being transparent about decisions that will impact employees in an effort to minimize uncertainty,” a Valeant spokesperson stated. “We said that we expected headcount reductions at Salix when we announced the transaction and that there were no planned reductions to Salix’s Specialty Sales Forces or Hospital, Key Account and Field Reimbursement teams.”
This news comes only a month after Valeant announced layoffs with its new asset, Dendreon. On March 3, 2015, the company announced 77 employees would lose their jobs. Valeant acquired Dendreon’s assets on Feb. 22, 2015 for $400 million.
Valeant completed its acquisition of Salix for $10.96 billion on April 1. Salix was very close to being bought by Allergan Inc. (AGN) in November 2014, when Allergan’s due diligence discovered major accounting and inventory problems. Allergan bailed, but Valeant stepped in as a stalking horse bidder as the company declared bankruptcy and auctioned off its assets.
Salix commercializes products for gastrointestinal disorders. Its most successful brands are Xifaxan for traveler’s diarrhea and Uceris for ulcerative colitis. The company also expects Xifaxan will soon get approval by the U.S. Food and Drug Administration (FDA) for the treatment of irritable bowel syndrome.
Valeant is noted for being a “serial acquirer.” The company, headquartered in Laval, Quebec, has a complete portfolio of products in eye care, neurosciences, dermatology and urologics. Since 2008, Valeant has acquired more than 100 smaller companies.
The company was embroiled in a hostile takeover bid of Allergan Inc. with Bill Ackman’s New York hedge fund, Pershing Square Capital Management. Though ultimately defeated, the rancorous bid resulted in allegations of insider trading and an investigation by the Security and Exchange Commission (SEC).
The Salix job cuts have been across the board. The Raleigh workforce was involved in finance, human resources, marketing and other areas. The layoffs have hit anyone from administrative assistants to senior vice presidents. In the past, analysts have noted that Valeant, when acquiring a new company, typically cut research and development spending.
“The company has instituted this layoff in connection with synergies that will be achieved as a result of a recent acquisition of the company by Valeant Pharmaceuticals International,” the WARN stated. The layoffs began about the same time the ink dried on the acquisition deal and will finish by the end of October.
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