December 8, 2016
By Alex Keown, BioSpace.com Breaking News Staff
DUBLIN – Endo International is cutting 375 members of its U.S.-based sales force after the company decided to return the Belbuca (buprenorphine) buccal film product used for chronic pain to BioDelivery Sciences International, Inc.
Paul Campanelli, president and chief executive officer of Ireland-based Endo, said the Belbuca program no longer aligns with Endo’s U.S. branded segment strategy. It also did not align with the focus on the company’s core products.
“We believe that this path provides our U.S. Branded business with its best opportunity for success going forward,” Campanelli said.
In a statement this morning, Endo said the return of Belbuca leaves the company with a portfolio of established pain medications that do not require team of field sales representatives. The company said the job cuts include full-time and contract sales employees. Additionally, the cuts include internal support to the promoted pain business unit, the company said. Terminating the sales force will allow Endo to focus on its core U.S. branded drugs, which includes Xiaflex, which is used to treat Dupuytren’s contracture in adults. Endo is hoping regulatory agencies will approve the expansion of Xiaflex for cellulite. Legacy pain products for the company include Opana ER and Percocet, as well as others. Sales for those legacy drugs will be managed as mature brands, Endo said.
Terminating the Belbuca agreement and laying off the 375 employees are expected to result in restructuring charges of about $62 million. That includes a $40 million noncash intangible asset impairment claim, Endo said. The restructuring is also expected to provide the company with approximately $90 million to $100 million in annual run rate pre-tax gross cost savings in 2017.
As a result of ending its Belbuca agreement with BDSI, Endo will no longer provide future royalty or milestone payments to that company. Also, Endo said it will not be eligible for any future royalty payments from commercialization of the product.
More changes to Endo could be coming. Campanelli said company leadership continues a “product-by-product portfolio assessment,” as well as development of a full corporate strategy. Endo leadership will go into greater detail of the plans in February, when the company provides fourth quarter and full-year 2016 results, Campanelli said.
The sales team layoffs are not the first ones under Endo’s restructuring. In May, the company shuttered a facility in Charlotte, N.C. and laid off a total of about 740 employees across several of its sites.
The Belbuca product is also not the first the company has divested itself of in recent times. The company has also divested itself of several divisions that were capital resource drains, including its AMS Men’s Health business and Astora Women’s Health, the maker of vaginal mesh used to treat pelvic organ prolapse in addition to urinary incontinence. The company said it has set aside money for litigation against the vaginal mesh products.
