Allergan has announced restructuring, which includes staff reductions of 1,000 employees in commercial and other functions, the elimination of 400 open positions, and other cost-cutting actions. The company made the announcement as part of a January 3, 2018 filing with the US Securities and Exchange Commission (SEC).

The company said the restructuring is in response to the anticipated loss of exclusivity of several key revenue-generating products in 2018, Allergan says it is optimizing and restructuring its operations in early 2018. The commercial reductions will primarily focus on products and categories subject to loss of exclusivity.

Allergan is facing generic-drug competition for one of its top-selling drugs, Restasis (cyclosporine ophthalmic emulsion), an eye-care product, which had global 2016 sales of $1.4 billion. Allergan took a $3.2-billion impairment charge related to Restasis in the third-quarter of 2017 following an adverse trial decision by a federal district court in October 2017 that found that four asserted patents covering Restasis were invalid. Allergan is involved in patent litigation for Restasis with several generic-drug companies.

In its January 2018 SEC filing, the company said it expects to incur related restructuring costs of approximately $125 million, primarily due to severance, the majority of which will be recorded in the fourth quarter ended December 31, 2017. These amounts do not include additional charges related to potential building closures, contract terminations, and other items. The company says it will achieve additional cost reductions through non-headcount spending rationalization. Overall operating expense savings from this internal restructuring are expected to be in the range of $300 million to $400 million as compared to the fiscal year 2017.

In another development, after submitting a citizen petition in August 2017 concerning the FDA’s bioequivalence recommendations for Restasis, Allergan’s petition was rejected on January 2, 2018.

Source: Allergan (SEC filing) and FDA (citizen petition rejection)