King Pharmaceuticals plans to lay off 20% of its workforce in an effort to speed up its strategic focus in neuroscience and hospital/acute care. The company estimates that the firings and other reductions in general and administrative expenses will save $75 million to $90 million in 2008

In September 2007, the U.S. Court of Appeals ruled against the continued validity of the patent covering King’s Altace product. The company has filed a petition with the court seeking reconsideration of the decision, asserting it involves significant errors.

“We believe the expense reduction measures announced today will enable us to continue generating strong cash flow to invest in our pipeline and business development opportunities, further strengthening our neuroscience and hospital/acute care platforms,” said Joseph Squicciarino, King’s chief financial officer.

In recent years, King has developed a pain management franchise, which includes existing products like Skelaxin and Avinza, as well as products in development like Remoxy, a long-acting oral oxycodone. In the hospital/acute care area, King’s portfolio of products is led by Thrombin-JMI and auto-injector products, including Epipen.

Brian A. Markison, King’s chairman, president and chief executive officer, remarked, “We remain committed to expanding our product portfolio through investing in R&D, acquiring exciting late-stage compounds and continuing as a partner of choice for promising products and technologies.”

King will incur special charges during 2007 of approximately $150 million to recognize the impaired value of its intangible assets associated with Altace and approximately $90 million primarily related to the impaired value of raw material inventory and related contracts associated with the drug. The company will also incur a one-time charge of approximately $70 million during 2007 related to this restructuring.