Santarus, Inc. (NASDAQ: SNTS), a specialty biopharmaceutical company, today announced that pursuant to its distribution and supply agreement with Prasco, LLC, Prasco is commencing shipments of an authorized generic of prescription ZEGERID® (omeprazole/ sodium bicarbonate) Capsules in 20 mg and 40 mg dosage strengths in the U.S. under the Prasco label. ZEGERID is an immediate-release proton pump inhibitor (PPI) approved as a prescription product in the U.S. for the treatment of certain upper gastrointestinal diseases and disorders.
“I want to acknowledge the dedication and commitment of all of our employees, especially those whose positions have been eliminated, and sincerely thank them for their hard work and their contribution to the growth of Santarus.”
In connection with the anticipated launch of a competitor's generic version of prescription ZEGERID Capsules, Santarus is ceasing promotion of ZEGERID prescription products effective immediately and is implementing a corporate restructuring, including a workforce reduction of approximately 37%, or approximately 120 employees, in its commercial organization and certain other operations. Santarus is also significantly reducing the number of contract sales representatives that it utilizes. Santarus expects to retain up to approximately 110 sales representatives, including a small number of contract sales representatives, to promote GLUMETZA® (metformin HCl extended release tablets), a product for the treatment of patients with type 2 diabetes.
"This is an extremely difficult decision for our company, but a necessary one in light of the anticipated launch of a generic version of ZEGERID," said Gerald T. Proehl, president and chief executive officer. "I want to acknowledge the dedication and commitment of all of our employees, especially those whose positions have been eliminated, and sincerely thank them for their hard work and their contribution to the growth of Santarus."
He added, "With this restructuring we have sized our commercial organization to support the promotion of GLUMETZA while we continue to advance our lower GI product candidates, budesonide MMX® and rifamycin SV MMX®, through Phase III clinical development. We are also increasing our efforts to acquire or license additional specialty pharmaceutical products."
Excluding non-cash charges associated with the modification of stock options, the company expects to record restructuring-related charges in the third quarter totaling approximately $7.4 million to $8.5 million. These charges include approximately $5.3 million to $6.0 million in one-time termination benefit costs, $2.0 million to $2.3 million in contract termination costs and $0.1 million to $0.2 million in other costs associated with the workforce reduction. Substantially all of these charges are expected to represent cash expenditures. The company also is offering to accelerate the vesting of stock options and extend the period for exercising vested stock options for affected employees and is unable to estimate these non-cash charges at this time. Santarus expects that selling and marketing expenses will be reduced by approximately $40 million annually beginning in the 2010 fourth quarter as a result of the corporate restructuring and workforce reduction.
Data, Design, and Discovery: Andrew Buchanan's Impact on Biologics Innovation