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King Pharmaceuticals to lay off 70 at Bristol headquarters

BRISTOL, Tenn. — Citing a court decision last week that could hasten the entry of a generic competitor to its muscle relaxer Skelaxin, a King Pharmaceuticals spokesman said Friday the company will lay off 70 workers at its Bristol headquarters, a 14 percent reduction.

“What led to this was the court decision last week regarding Skelaxin,” said James Green, King’s executive vice president for corporate affairs, adding that all the affected employees will have jobs at least through March.

Last week, a judge in New York ruled in favor of Eon Labs’ request to overturn two of King’s patents on Skelaxin, which accounted for about a quarter of King revenues in 2008. The decision paved the way for an earlier generic version than King was expecting. King plans to appeal the ruling, but Green said cost-cutting measures still were needed.

“You’ve got a decision and the possibility has been raised, so you have to plan for that possibility,” he said.

“The uncertainty that decision creates with respect to the timing of the entry of a generic for Skelaxin to the market (put us) in the process of aligning our cost structure with the existing business requirements as we see them in light of that decision.”

King, which recently announced it will purchase New Jersey-based Alpharma, will lay off workers in other locations, but Green wouldn’t cite specifics.

“Every department was affected,” Green said of the Bristol cuts, which hit corporate affairs, legal, human resources, technical operations, quality control and regulatory affairs.

While he said such responses to loss of exclusivity are “not uncommon” in the pharmaceutical industry, Green said the personnel decisions were difficult.

“These decisions are unfortunate, and many talented people are being affected by these changes,” Green said. “But the actions are necessary in order to align our cost structure with our business.”

King went through a similar downsizing in late 2007 — cutting 20 percent of its work force — when patents on its branded hypertension drug Altace led to its going generic.

All the affected employees will receive what Green called transition support, including severance pay, with paid benefits during the severance pay period as well as career transition services.

“We’re grateful for these employees’ contributions to King Pharmaceuticals and are committed to helping them through the transition,” Green said.

Last week, Green said the key for King long term is successful development and approval of new drugs, and the company continues trying to carve a niche in abuse-resistant painkillers.

“We have an entire portfolio of opioids that we’re developing that are designed to deter common methods of abuse and misuse, and we’re a leader in these types of products,” Green said.

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