Alkermes' ( ALKS) shares lost 7% Monday after the company disclosed it is cutting a quarter of its staff and refocusing product development following a regulatory setback and expected lower revenue. Effective Monday, Cambridge, Mass.-based Alkermes cut its staff by 122 employees to 419. It expects to save $20 million to $25 million in 2003, excluding restructuring costs, and $40 million to $45 million next year from the staff reduction and other savings. The company will take a one-time restructuring charge of $3.5 million to $4.0 million in the second quarter, which ends Sept. 30. Shares of Alkermes were recently down 75 cents to $9.29. In product development, the company said it will now focus on programs that are in the later stages of clinical development and that involve the "most productive collaborations." The company cited an expected delay in FDA approval of Reserdal Consta, a schizophrenia drug using Alkermes' technology that is made by Johnson & Johnson ( JNJ). "Alkermes' long-term strategy and business plan remain on track. We are adjusting our staffing levels to align with near-term revenues which we anticipate will be lower than expected due to regulatory delays," the company said in a release. Analysts polled by First Call/Thomson Financial expect the company to have a loss of 30 cents a share in its second quarter.