Alkermes (ALKS) to Scale Back Athlone, Ireland Plant; Sees 130 Job Losses Over Two Year, Charges

On April 4, 2013, the board of directors of Alkermes Pharma Ireland Limited (“APIL”), a wholly owned subsidiary of Alkermes plc (Nasdaq: ALKS), approved a restructuring plan related to its Athlone, Ireland manufacturing facility (the “Plan”) consistent with the evolution of the Company’s product portfolio and designed to improve operational performance for the future. Under the Plan, APIL will terminate manufacturing services for certain older products becoming uneconomic to produce due to decreasing demand from its customers resulting from generic competition. In fiscal year 2013, these products are expected to represent less than 5% of the Company’s total revenues. As a result of the termination of these services, it is contemplated that APIL will also implement a corresponding reduction in headcount of up to 130 employees. The Company expects the Plan to commence immediately and to be implemented over a period of approximately two years. This Plan is expected to result in estimated annual cost savings of between $15 million to $20 million by fiscal year 2016 and beyond. The Company expects to continue to generate revenues from the manufacturing of these products during fiscal year 2014 and, for certain of these products, into fiscal year 2015. In conjunction with the Plan, the Company expects to incur a one-time, cash restructuring charge related to severance and other employee-related expenses of approximately $12.5 million, which will be recorded during the fiscal quarter ended March 31, 2013. This charge was not previously included in the Company’s financial guidance for fiscal year 2013. As part of the Plan, the Company also expects to incur non-cash charges resulting from the accelerated depreciation of certain manufacturing assets, which are currently estimated to be approximately $10 million in fiscal year 2014 and $7 million in fiscal year 2015.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Z Squared outlines AI power strategy and Paradox Data acquisition
• CleanCore Solutions to rename itself Zone Frontier Inc. on Aug. 31
• William Blair cites tight labor market in staffing stock outlook