The statutory negotiations which were initiated in Orion Corporation with personnel representatives in November 2008 with emphasis on changes in the operational model and structure of pharmaceutical research and development, have been completed. In result, a decision has been made to reduce the company's personnel in Finland by altogether about 205 persons, of which about 175 will be given a notice and about 30 positions will be terminated through retirement and other arrangements. According to the original estimate, the negotiations could have led to cutting up to 300 jobs. In its financial period Q4/2008, Orion will book a non-recurring charge of preliminarily about EUR 3.9 million relating to the structural rearrangements.
The number of employees at Orion's Espoo site will be reduced via a notice by about 105 persons, in Turku by about 55 and in Kuopio by about 15 persons. The reductions will be implemented mainly in the course of the first half of 2009.
The non-recurring charge of about EUR 3.9 million will be booked in Q4/2008 relating to costs of personnel and other expenses caused by the rearrangements. A more exact figure will be proved in the company's financial statements for 2008, which will be published on 6 February 2009. This charge does not, however, give reason to revisit the latest financial full-year outlook estimate for 2008 provided in the Interim Report 1-9/2008, according to which the operating profit, excluding non-recurring items, is estimated to grow slightly from 2007. Such non-recurring items include the one-off compensation of EUR 6 million for the termination of the Calcimagon licence agreement in 2007, the patent litigation expenses which for 1-9/2008 were EUR 4.4 million, and the about EUR 3.9 million for the rearrangements in R&D.
By introducing a more flexible operational model and cost structure for its pharmaceutical R&D Orion prepares for ensuring its prerequisites of doing business as well as its competitiveness even in the early part of the next decade, after the expiry of the basic patents protecting its most important products. The company will increase early-phase R&D collaboration with universities and other pharmaceutical companies, and, on the other hand, will share costs with other operators in clinical research phases. This is how Orion will make it possible to increase the volume of research projects and strengthen its strategic capability to be a company offering new medicinal treatments even in the future, with continued engagement in pharmaceutical research and development.
Orion Corporation
Timo Lappalainen Olli Huotari
President and CEO SVP, Corporate Functions
Contact persons:
Timo Lappalainen, President and CEO, phone + 358 10 426 3692 (available as of about 11.00 am)
Kirsi Nurmela, VP, Human Resources, phone +358 10 426 4343
Analysts: Jari Karlson, CFO, phone +358 10 426 2883
ABOUT ORION
Orion is dedicated to treating and preventing disease by discovery and developing innovative medicinal treatments. In 2007, Orion generated net sales of EUR 683.6 million and invested EUR 98.5 million in research and development. In the end of 2008, the number of employees in the Orion Group was approximately 3,300, of which 2,700 persons were working in Finland. Orion corporate headquarters are in Espoo, Finland. For more information, please visit http://www.orion.fi/english/. The financial statements of the Orion Group for 2008 will be published on 6 February 2009.
Publisher:
Orion Corporation
Communications
Orionintie 1A, FI-02200 Espoo
Homepage: www.orion.fi