joined the ranks of restructuring drugmakers Wednesday when it announced it would trim staff and implement a strategic plan to increase profitability.
The New York-based company will lay off about 10% of its staff, or roughly 4,300 employees, and it will close upwards of 50% of its manufacturing facilities, resulting in pretax cost savings of $1.5 billion by 2010. Bristol estimates the costs associated with the initiative will be between $900 million and $1.1 billion on a pretax basis, expecting to incur $300 million of that in 2007.
The company said it plans to reallocate resources to allow it the flexibility to pursue strategic acquisitions and partnerships as well as other collaborations to enhance its portfolio and pipeline.
Bristol said it will continue to invest in key growth products, such as specialty and biologic medicines, and cardiovascular and metabolic drugs. It will continue to scale back assets in its "profitable, though declining, mature brands," reducing the number of brands in its mature products portfolio by 60% between 2007 and 2011. Also, Bristol intends to divest its Medical Imaging business and is reviewing strategic alternatives for its ConvaTec and Mead Johnson businesses.
The company revised its 2007 per-share earnings guidance to a range of $1.15 to $1.20 from a range of $1.28 to $1.33, and reaffirmed non-GAAP guidance of the high end of the $1.42 to $1.47 range. The company raised expectations for full-year 2008 non-GAAP earnings to $1.65 to $1.75 a share from $1.60 to $1.70 a share.
Shares closed 20 cents, or 0.7%, higher at $29.26.