July 7, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Pernix Therapeutics , headquartered in Morristown, New Jersey, announced that as part of a restructuring, it will lay off 54 sales staff and six administrative staff, accounting for 23 percent of its work force.
Pernix is a specialty pharmaceutical company focused on the U.S. market, especially in the therapeutic areas of central nervous system, including neurology and psychiatry.
The company indicated that the restructuring is designed to increase the effectiveness of its sales force. The four components of the restructuring include cutting 54 sales positions, mostly from its eurology sales team, reprioritizing and reorganizing its sales territories, changing its sales compensation plan, and consolidating its neurology and pain sales teams under a single management structure.
“Since I took over the CEO duties at Pernix, we have been performing a thorough analysis of the specific market opportunities served by our products and how well they are addressed by our existing organizational structure,” said John Sedor, the company’s chairman and interim chief executive officer in a statement. “As part of this analysis, it became clear that there were significant opportunities to optimize Pernix’s field force to more efficiently cover the most productive physicians. The actions announced today are designed to improve productivity, instill a more results-based culture and enable Pernix to more effectively serve our customers.”
The restructuring is expected to save $10 million in annual costs starting in the third quarter of this year. There is a projected $2 million one-time charge related to the changes.
Sedor took over on May 11 of this year after Doug Drysdale, former chair, chief executive officer and president resigned. Sedor had been a director and is expected to remain as chairman, but the board is currently searching for a permanent chief executive.
Sedor has been the chairman and chief executive officer of SEDOR Pharmaceuticals since 2014. He was the president, chief executive officer and director of Cangene from 2011 until February 2014, when it was acquired by Emergent BioSolutions . And before that, from 2008 to 2011, he was chief executive officer and president of CPEX Pharmaceuticals.
In addition, on May 9, Pernix informed the Listing Qualifications Department of the NASDAQ Stock Market that it wasn’t in compliance with NASDAQ’s audit committee composition requirements. An audit committee must have at least three independent members. Since Sedor stepped up as interim chief executive, there are only two independent directors on the company’s audit committee. The company is working to fill that position before November 5.
“I would like to thank each and every one of the affected employees for their hard work and dedication to Pernix during their tenures there,” Sedor said in a statement. ‘While it is extremely difficult to execute work force reductions, this initiative is necessary to drive sales growth effectively, while building a more efficient organization. These actions represent an important step in our efforts to unlock the significant value that currently exists within Pernix.”
