A Medical Device Daily
Eye care giant Alcon (Fort Worth, Texas) is laying off 260 employees worldwide, according to various media reports, including the Associated Press and the Fort Worth Star-Telegram.
The company reported fourth-quarter revenue last week of $1.5 billion, a 1.9% increase. Alcon said its sales growth would have been 6.4% if it hadn't been for the effect of currency changes and an acquisition. Profit for the quarter was $423.6 million, up from $376.5 million.
Cary Rayment, Alcon's chairman/president/CEO, said in a company statement regarding Alcon's fourth-quarter results that the company "delivered solid financial results for the fourth quarter and full year of 2008, and did so in a challenging business environment, which accelerated in the fourth quarter.
"In response to the environment we expect to face in 2009, we will prioritize spending on research and development and market development activities that drive future growth, while implementing actions to reduce our overall cost structure," Rayment said.
The company is cutting expenses and reducing about 1.5% of its work force to focus on developing new products and on doing business in emerging markets, such as China and India, Rayment said.
According to the Star-Telegram, Alcon notified workers Wednesday morning of the job cuts, which were felt the hardest at the headquarters. Of the 260 affected employees, 125 are in Fort Worth, 45 are elsewhere in the U.S. and the rest are in other countries. Alcon has about 2,800 workers in Fort Worth.
The Star-Telegram reported that last week's job cuts marked one of the few times in Alcon's history when employees have been eliminated on a significant scale, noting that there was a round of belt-tightening in the 1990s and that the company shut down an Orlando, Florida manufacturing facility about a year ago.
In other restructuring activity, Haemacure (Montreal) said it has implemented cost-cutting measures in order to preserve cash. At the same time, the company said it would continue to seek financing and would initiate a process intended to lead to a sale or merger of the company.
Haemacure said 12 of its 18 employees have been placed on leave in Montrael and Sarasota, Florida, and that all major consulting agreements have been suspended. The company also noted that Joseph Galli, CEO/chairman, and Marc Paquin, president, will both continue to work with the company for "nominal compensation" and that the company is undertaking measures with suppliers to restructure its obligations to them.
Haemacure said it has been seeking financing since the third quarter of 2008. Several parties have expressed interest in an equity financing, the company noted, "however, this interest has not materialized into a viable financing." In light of the state of the financial markets, the company said it believes that without operational changes its cash reserves will be exhausted before equity financing is completed, given its operational burn rate and its objective of getting into the clinic by the middle of this year.
The company said the restructuring measures it has taken provides it with a window of roughly 90 days in which to either arrange a bridge loan, obtain new financing, or to sell or merge the company.
It also noted that as a result of these measures, and unless new financing is obtained, Haemacure will not begin its pivotal phase II/III clinical trials for its lead product candidate, an all-human fibrin sealant, as planned this year. However, the company said it would continue, to the extent possible, with the preparation of the trials so that should funds become available the trials could begin without undue delay.