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news.Endo International has entered into an agreement with its partner, BioDelivery Sciences International (BDSI), to return the BELBUCA (buprenorphine) buccal film product to BDSI.
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Specific financial terms of the agreement have not been disclosed and are not material to Endo. Endo will not have any future royalty or milestone payments to BDSI and BDSI is not obligated for any future royalty payments to Endo.
With the return of BELBUCA to BDSI, Endo has a portfolio of established pain products that the Company believes no longer requires field sales promotion.
As a result, Endo also announced today that it is eliminating its 375-member U.S. Branded pain sales field force, which consisted of both full-time employees and contract sales representatives, as well as internal support to the promoted pain business unit. This will allow the Company to focus efforts and resources more fully on its core U.S. Branded assets, including XIAFLEX in the approved indications and the cellulite development program.
The Company's legacy pain portfolio products – including OPANA ER and Percocet, among others will be managed as mature brands.
Endo expects to realize cost savings, drive greater efficiency and enhance its operational focus with its newly realigned U.S. Branded segment. The above-described strategic actions are expected to result in restructuring charges of approximately $62 million, including a $40 million noncash intangible asset impairment charge, and are expected to provide approximately $90 million to $100 million in annual run rate pre-tax gross cost savings in 2017.
Endo anticipates a substantial portion of these cost savings will be redeployed in 2017 to support its core franchises, including the pursuit of the development and approval of XIAFLEX for cellulite following the Company's recent announcement of positive Phase 2b data.
The Company expects to provide 2017 Financial Guidance during its year-end Earnings call in late February 2017.
Paul Campanelli, President and CEO of Endo, said: "Since we entered into our licensing and development agreement with BDSI in 2012, the opioid market and Endo's strategic priorities have evolved. While we continue to believe BELBUCA™ is a differentiated asset, the product no longer aligns with Endo's U.S. Branded segment strategy and our focus on core assets, including XIAFLEX®, moving forward. We believe that this path provides our U.S. Branded business with its best opportunity for success going forward.
"We are extremely grateful for the efforts of our Pain salesforce and all who have supported the Pain business unit and want to acknowledge their dedication, commitment and hard work on behalf of the Company. Additionally, we look forward to working with BDSI on a smooth transition and we wish them future success."
"We are continuing our product-by-product portfolio assessment and the development of our full corporate strategy, which we plan to discuss in greater detail when we provide our fourth quarter and full year 2016 results in February 2017," added Mr. Campanelli.