Johnson & Johnson has announced plans for a global restructuring designed to “prioritize its innovation efforts,” according to a company statement. The plans are expected to increase operational efficiency and generate annual savings of $1.4-$1.7 billion, when fully implemented in 2011, with $800-$900 million expected in 2010. The savings will be allocated to new growth platforms; new product launches; core businesses; as well as provide more flexibility to adapt to the changing market. Along the way, the company will lay off 6-7% of its headcount, which equates to 7,000-8,000 people. The expected restructuring charge will be $1.1-$1.3 billion in 4Q09.

"Johnson & Johnson has long adhered to a broad-based operating model and set of sound management principles that have driven our success," said William C. Weldon, Johnson & Johnson chairman and chief executive officer. "Today, we are announcing a series of actions and plans designed to ensure that our company remains well-positioned and appropriately structured for sustainable, long-term growth in the health care industry."

The company plans to cut layers of management, increase individual spans of control, and simplify business structures and processes across the company's global operations. Mr. Weldon said, “These types of changes are difficult under any circumstances, and will have a very personal impact on people who have been dedicated to the mission of Johnson & Johnson. We recognize their contributions to the achievements of our business, and are committed to treating them fairly and with respect throughout this process.”

Enzon 3Q09

3Q Revenues: $44.6 million (-9%)

3Q Earnings: $0.1 million (loss of $2.0 million in 3Q08)

Comments: Product sales in the quarter were down 1% to $28.6 million.
Contract manufacturing revenue was $2.3 million (-57%), primarily due to cancelled shipments and early discontinuation of processing for a CMO customer scheduled for termination in early 2010. Royalty revenue, for which Pegintron accounts for the majority, was $13.7 million (-6%).

West 3Q09

3Q Revenues: $258.9 million (-1%)

3Q Earnings: $17.2 million (+27%)

YTD Revenues: $762.3 million (-5%)

YTD Earnings: $52.3 million (-24%)

Comments: Pharmaceutical Systems segment sales for the third quarter of were $198.1 million (+4%). Unfavorable foreign exchange accounted for 4%. H1N1 flu vaccination-related sales were $9.7 million in the quarter. Tech Group sales were $62.9 million (-8%).

The company also announced operational restructuring plans for its Tech Group and Pharmaceutical Systems segments. The Tech Group will consolidate manufacturing operations and support functions to better align capacity to contract manufacturing activity. Approximately 65 positions will be eliminated, which is expected to cost between $2 - $3 million. The company expects to generate annual operating cost savings of approximately $2 million in 2010 and $4 million once the restructuring is complete.

Under the Pharmaceutical Systems restructuring, the company will exit certain specialized lab service offerings; retire information technology applications and associated support; and abandon plans to expand its U.S. metals facility. Approximately 35 positions are being eliminated. The costs is expected to be $6 - $7 million, with cost savings in the range of $4.0 million annually.

Kenneth A. Berlin has been appointed president and chief executive officer, Rosetta Genomics, Ltd., and has been recommended to serve on the company’s board of directors.

Mr. Berlinpreviously served as worldwide general manager at Veridex, LLC, a Johnson & Johnson company. Under his leadership the organization grew to more than 100 employees, and he spearheaded the launch of three cancer diagnostic products. Mr. Berlin joined J&J in 1994 and served as corporate counsel for six years. He led and participated on the legal team that oversaw several mergers, acquisitions, divestitures and commercial transactions. He then held positions of increasing responsibility within J&J and a number of its subsidiary companies.

“Ken is a proven business leader whose background, accomplishments and commercialization experience in the novel diagnostics space are particularly well-suited for Rosetta Genomics at this time,” said Yoav Chelouche, chairman of the board of directors. “We have commercialized three microRNA diagnostic tests and have licensed or formed distribution agreements with six separate parties on five continents for these tests. As we further develop the markets for our paraffin-based microRNA diagnostic tests and pursue avenues to leverage our platform technology, we expect that Rosetta will benefit from Ken’s strong leadership, negotiating and alliance management skills as well as his portfolio management experience.”

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