Specialty biopharmaceutical company Santarus is ceasing promotion of Zegerid prescription products effective immediately.
Santarus has taken this initiative considering the anticipated launch of a competitor’s generic version of prescription Zegerid Capsules.
Gerald T. Proehl, president and chief executive officer of the company, termed this decision as a necessary one in light of the anticipated launch of a generic version of Zegerid.
The company, which is focused on acquiring, developing and commercialising proprietary products that address the needs of patients treated by gastroenterologists, endocrinologists and other physicians, has also chosen to cut pharmaceutical jobs.
Santarus is implementing a corporate restructuring, including a workforce reduction of approximately 37 percent, or approximately 120 employees, in its commercial organisation and certain other operations.
Santarus is also significantly reducing the number of contract sales representatives that it utilises. 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.
Santarus also shared that pursuant to its distribution and supply agreement with Prasco, the latter is commencing shipments of an authorised 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.
“With this restructuring we have sized our commercial organisation 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,” said Proehl.
As per the information available, in April, a U.S. federal judge ruled that five patents Santarus had for Zegerid were invalid, paving the way for Par Pharma to start selling its generic version. A medicine for frequent heartburn which was recently allowed to be sold over-the-counter, Zegerid’s first-quarter sales rose 5%, to $29 million, reported The Wall Street Journal.
Charges
The company expects to record restructuring-related charges in the third quarter totalling 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 is also 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.
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