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ICN to Slash Workforce and Sell Eight Factories

Drug firm hopes to save $200 million over five years so it can focus on building its product line.

October 16, 2003|Ronald D. White | Times Staff Writer

ICN Pharmaceuticals Inc. on Wednesday unveiled a major restructuring in which it would slash its workforce by more than a third and sell eight manufacturing plants within five years.

The Costa Mesa specialty pharmaceuticals firm said it hoped to save as much as $200 million over five years with the changes. That would allow it to focus more on drug research and product acquisitions.

ICN has about 2,900 manufacturing employees and will reduce that number to 1,300 to 1,400, company spokesman Jeff Misakian said.

ICN had about 8,000 manufacturing employees before it sold various plants, biomedical and research products and diagnostics businesses this year.

In one such sale, the company in June unloaded its Russian operations, including factories and a pharmacy chain.

Robert W. O'Leary, ICN's chief executive, has been trimming the global enterprise set up by company founder Milan Panic, who resigned under pressure from shareholders last year.

"This comprehensive global manufacturing and supply chain strategy will enable us to achieve our commitment to restructure operations and reduce our cost of goods sold to 20% to 25% over the next five years," Timothy C. Tyson, ICN's president and chief operating officer, said in a statement.

Darshana Punithakumar, an analyst for Mehta Partners, said the payroll reductions made sense because several of the plants were operating well short of their capacity.

The company will sell plants in Ohio, Mexico, Brazil, Poland, Canada and Spain, plus two facilities in Argentina.

ICN's shares fell 5 cents to close at $19.53 in trading on the New York Stock Exchange. The company's stock is up 79% so far in 2003.

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