Pernix Therapeutics Holdings Inc (NASDAQ:PTX), a specialty pharmaceutical company, today announced an initiative intended to optimize the Company’s resources and improve the effectiveness of its sales force. As part of this effort, Pernix has reduced its total full-time work force by approximately 23 percent.
“Since I took over the CEO duties at Pernix, we have been performing a thorough analysis of the specific market opportunities served by our products and how well they are addressed by our existing organizational structure,” said John Sedor, Pernix’s Chairman and Interim CEO. “As part of this analysis it became clear that there were significant opportunities to optimize Pernix’s field force to more efficiently cover the most productive physicians. The actions announced today are designed to improve productivity, instill a more results-based culture and enable Pernix to more effectively serve our customers,” said Mr. Sedor.
The key elements of this reorganization plan include: (1) a reduction of 54 sales positions, primarily from Pernix’s Neurology sales team; (2) prioritization and reorganization of sales territories to reduce the inefficient time that sales representatives spent driving long distances between customers; (3) improvement of the Company’s compensation plan to incentivize the field sales staff to increase the frequency of calls on the focused targets; and (4) consolidation of the Neurology and Pain sales forces under one sales management structure to eliminate redundancies. In addition, as part of this initiative, Pernix is reducing its administrative staff by 6 employees.
“I would like to thank each and every one of the affected employees for their hard work and dedication to Pernix during their tenures here,” said Mr. Sedor. “While it is extremely difficult to execute work force reductions, this initiative is necessary to drive sales growth effectively, while building a more efficient organization. These actions represent an important step in our efforts to unlock the significant value that currently exists within Pernix.”
Pernix anticipates that this reorganization will result in an estimated annualized cost savings of approximately $10 million, beginning in the third quarter 2016. The Company expects to take a one-time charge of approximately $2 million in the third quarter of 2016 in connection with this reorganization.
As of today, Pernix remains in compliance with all covenants in its debt facilities and anticipates making its interest and principal payment on the Company’s Senior Secured Notes on August 1, 2016. (Original Source)
Shares of Pernix closed yesterday at $0.44, down $0.01 or -1.12%. PTX has a 1-year high of $6.44 and a 1-year low of $0.39. The stock’s 50-day moving average is $0.48 and its 200-day moving average is $1.38.
On the ratings front, Pernix has been the subject of a number of recent research reports. In a report issued on May 6, Brean Murray Carret analyst Difei Yang reiterated a Buy rating on PTX, with a price target of $3, which implies an upside of 581.8% from current levels. Separately, on March 16, Oppenheimer’s Akiva Felt downgraded the stock to Hold .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Difei Yang and Akiva Felt have a total average return of -9.5% and -0.4% respectively. Yang has a success rate of 42% and is ranked #3857 out of 4013 analysts, while Felt has a success rate of 34% and is ranked #2786.
Pernix Therapeutics Holdings, Inc. engages in the research, development, and manufacture of biopharmaceutical products. It focuses on therapeutics for diseases on central nervous system, neurology, pain, and psychiatry. Its products include treatment of migraine pain and inflammation, insomnia, and depressive disorder. The firm distributes its products under the following brands: Treximet, Silenor, Zohydro ER with BeadTek, and Khedezla.