Allergan axing 1,000-plus jobs, prepping for a painful onslaught of Restasis knockoffs

Allergan $AGN is slashing more than a thousand jobs and eliminating 400 open positions as it braces for the painful impact of generic competition to its big Restasis franchise.

Allergan CEO Brent Saunders has been slapping back at critics after trying to guard its IP on its $1.5 billion eye drug Restasis by transferring the patents to a Mohawk Indian tribe, which claimed sovereign immunity on the patent front. But in a separate case a federal judge recently decided to invalidate the patents, leaving Allergan exposed to a painful hit.

Allergan has a work force of 18,000 staffers, says a spokesperson, with 9,000 engaged in marketing. The cuts will slash about 8% of the total job count.

Allergan hasn’t formally thrown in the towel yet on the $14 million Mohawk deal, but its restructuring today indicates that the company is prepping for a market slap down. The federal judge had this to say about the company’s attempted end run on sovereign immunity:

The Court has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed. The essence of the matter is this: Allergan purports to have sold the patents to the Tribe, but in reality it has paid the Tribe to allow Allergan to purchase—or perhaps more precisely, to rent—the Tribe’s sovereign immunity.

If that ploy succeeds, any patentee facing IPR proceedings would presumably be able to defeat. But sovereign immunity should not be treated as a monetizable commodity that can be purchased by private entities as part of a scheme to evade their legal responsibilities.

The bulk of the cuts are being aimed at commercial operations associated with Restasis, according to an SEC filing. Allergan expects to incur $125 million in costs associated with the move, primarily for severance pay. And it’s counting on $300 million to $400 million in savings this year.

A spokesperson for Allergan declined to elaborate to Endpoints News on where the ax is falling.

Image: Brent Saunders. AP Images

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