BRIDGEWATER, N.J. — Amneal Pharmaceuticals announced this week a comprehensive restructuring plan designed to reduce its cost base, further right size its organization and optimize its global manufacturing infrastructure.
“Recently we initiated an in depth, company-wide review of our organizational structures, operational budgets, current and future capital projects, and existing capability and infrastructure alignments,” said Rob Stewart, president and chief executive officer of Amneal. “We undertook this review in response to the continuing industry challenges impacting our business, including ongoing pressure on our base generics business from the limited number of buyers and the greater than expected effect of additional competition on our key generic products. Additionally, while the value from our complex product pipeline is still expected to be realized, it continues to take longer to materialize than we expected.”
“As a result of this review we have decided to take immediate steps to re-align our business infrastructure and cost base in an effort to align our company to better deal with the current business realities,” said Mr. Stewart. “These decisive actions represent a difficult but necessary step forward to position Amneal for future success.”
The restructuring plan is expected to reduce Amneal’s total annual cost base by approximately $50.0 million. A majority of the restructuring milestones are expected to be achieved during 2020, with the full benefit of these actions being realized in 2021 and beyond. The company will continue to monitor its cost base in light of market dynamics.
Key elements of the restructuring plan include substantial operating budget reductions and revised, more efficient organizational structures across all company functions; re-prioritization of R&D projects to focus on key, limited-competition opportunities; and realignment of manufacturing and R&D infrastructure to be more cost efficient and agile in responding to market opportunities.
Additional details regarding the restructuring plan and restructuring charges will be provided in the future.
The company also announced that as a result of continuing market pressure and additional competition on its key generic products, the uncertainty of supply of epinephrine auto-injector (generic Adrenaclick) from its third-party supplier during the high seasonal third quarter, as well as delays in key product approvals and launches including generic NuvaRing, it currently expects adjusted EBITDA for 2019 to now be in the range of $425 million to $475 million.
The company will revise its remaining 2019 financial guidance metrics (previously announced on May 9, 2019) when it reports its second quarter 2019 results on August 8, 2019.
Stewart concluded, “I recognize these actions represent considerable change for Amneal. As a responsible employer, we are committed to treating all employees fairly and providing those who will be affected by these actions a comprehensive transition plan. The changes announced today were not made lightly, but are necessary to ensure that Amneal continues to deliver on our commitment to provide affordable medicines for patients and value for stakeholders.”