Imprimis Pharma (IMMY) Announces Cost-Reduction Initiatives; Includes 8% Workforce Reduction
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Imprimis Pharmaceuticals, Inc. (NASDAQ: IMMY) announced that it has implemented an expense reduction program to better leverage the company's state-of-the-art drug production infrastructure, eliminate redundant expenses and enable near term profitability without hindering growth plans.
Following recent company-wide improvements in technology integration, production automation, quality systems and supply chain efficiencies, the company has ceased operations at its Texas facility and implemented an 8% reduction in total headcount. The company will leverage recent investments made to its New Jersey facility, including new production processes and filling and labeling automation, to offset previously planned production in Texas. These actions are expected to streamline Imprimis' operations and reduce expected cash based expenses by nearly $3 million annually without impacting the company's growth plans. Imprimis is currently exploring alternatives for use of the Texas facility, but estimates it will incur total restructuring costs of approximately $0.6 million under the plan, the majority of which is expected to be non-cash based expenses and incurred in the third quarter of this year.
Imprimis plans to register its recently constructed New Jersey facility with the U.S. Food and Drug Administration (FDA) as a 503B outsourcing facility later this year following successful completion of qualification of the facility and equipment, stability studies for key formulations and other quality assurance related activities. The company believes recent investments made to its New Jersey facility, along with production capacity in Irvine, California and Folcroft, Pennsylvania, will support long-term plans of achieving nine figure annual sales revenues.
Mark L. Baum, Chief Executive Officer of Imprimis, stated, "We continue to experience strong growth in several important markets, including those for new products we have recently brought to market; however, the time has come to discipline our expenses and commit ourselves to moving towards profitability. As we experience continued top line growth, improving margins and now a reduction in expenses, this plan efficiently utilizes our considerable sterile and non-sterile production and dispensing capacity on both coasts and ensures our commitment to advancing our vision of delivering innovative medicines at accessible prices, while generating a strong return to our shareholders."
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