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ALKS > SEC Filings for ALKS > Form 8-K on 9-Apr-2013All Recent SEC Filings

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Form 8-K for ALKERMES PLC.


Costs Associated with Exit or Disposal Activities

Item 2.05 Costs Associated with Exit or Disposal

On April 4, 2013, the board of directors of Alkermes Pharma Ireland Limited ("APIL"), a wholly owned subsidiary of Alkermes plc (the "Company"), approved a restructuring plan related to its Athlone, Ireland manufacturing facility (the "Plan") consistent with the evolution of the Company's product portfolio and designed to improve operational performance for the future.

Under the Plan, APIL will terminate manufacturing services for certain older products becoming uneconomic to produce due to decreasing demand from its customers resulting from generic competition. In fiscal year 2013, these products are expected to represent less than 5% of the Company's total revenues. As a result of the termination of these services, it is contemplated that APIL will also implement a corresponding reduction in headcount of up to 130 employees. The Company expects the Plan to commence immediately and to be implemented over a period of approximately two years.

This Plan is expected to result in estimated annual cost savings of between $15 million to $20 million by fiscal year 2016 and beyond. The Company expects to continue to generate revenues from the manufacturing of these products during fiscal year 2014 and, for certain of these products, into fiscal year 2015.

In conjunction with the Plan, the Company expects to incur a one-time, cash restructuring charge related to severance and other employee-related expenses of approximately $12.5 million, which will be recorded during the fiscal quarter ended March 31, 2013. This charge was not previously included in the Company's financial guidance for fiscal year 2013.

As part of the Plan, the Company also expects to incur non-cash charges resulting from the accelerated depreciation of certain manufacturing assets, which are currently estimated to be approximately $10 million in fiscal year 2014 and $7 million in fiscal year 2015.

Information contained in this Current Report on Form 8-K that relate to the Company's expectations regarding implementation of the Plan, expected charges to be incurred under the Plan and expected savings to be realized as a result of the Plan, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the Company's "Risk Factors" included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2012, as filed with the Securities and Exchange Commission on May 18, 2012. The forward-looking statements contained herein speak only as of the date of this report. Except as required by law, the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date such statements are made.

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