Chiron Corp. said it is laying off about 75 employees and notrenewing contracts on another 30 at Betaseron manufacturingfacilities in Puerto Rico and Amsterdam.
The Emeryville, Calif., company attributed the layoffs to excessmanufacturing capacity of the multiple sclerosis drug. Chironmanufactures the product for Germany-based Schering AG's U.S.affiliate, Berlex Laboratories Inc., which markets it in the U.S.
Chiron's stock (NASDAQ:CHIR) dropped $2.50 after Thursday'sannouncement, then gained 25 cents Friday to close at $53.75.
A restructuring charge of less than $10 million related to the layoffsis expected to be taken in the first quarter, said Larry Kurtz, Chiron'svice president, corporate communications. Total charges taken in thefirst quarter are "certainly going to approach if not exceed $300million," he said. Much of the charge involves write-offs related tothe partnership agreement with Ciba-Geigy Ltd., of Basel,Switzerland.
Kurtz said Chiron wasn't planning to ship any Betaseron, orinterferon beta-1b, in the first quarter. But when shipments resume inthe second quarter they will be under a new accounting system inwhich Chiron will recognize only a portion of the revenue. The restwill be recorded after the sale. Previously Chiron was paid when theproduct was shipped.
"We have been saying that the quantity of Betaseron we ship in 1995will be about the same as in 1994," Kurtz said, "but because of theaccounting change the revenue will be lower." Chiron's share of1994 Betaseron sales was about $100 million.
Separately, the company said Friday its Chiron Vision businesscompleted the acquisition of the IOLAB ophthalmic surgical divisionfrom Johnson & Johnson for about $95 million in cash. (SeeBioWorld Today, March 8, 1995, p. 1.) _ Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.