Job Cuts Coming to Forest Labs

Forest Laboratories (FRX) 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 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.

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