Job Cuts Coming to Forest Labs

by Karl Utermohlen | December 2, 2013 3:21 pm

Job Cuts Coming to Forest Labs

Forest Laboratories (FRX[1]) is getting rid of 500 jobs — or about 9% of its employees — to cut costs and buy the rights to distribute a drug.

The company is expected to save $500 million by 2016[2] and it will buy back at least $400 million in company stock according to ABC News. The move to eliminate jobs will help Forest save about $270 million in its research and development operations as well as $150 million from marketing expenses. The rest of the money will come from general and administrative costs.

Forest is also planning on paying $240 million for the U.S. marketing rights to Saphris, a Merck schizophrenia and bipolar mania treatment drug. The deal will be complete by early 2014 and the company expects the drug to make an immediate impact on its profit.

Endnotes:
  1. FRX: http://studio-5.financialcontent.com/investplace/quote?Symbol=FRX
  2. The company is expected to save $500 million by 2016: http://abcnews.go.com/Business/wireStory/forest-labs-plans-cut-500m-spending-21068858

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