UPDATED: Endo to slash 700 jobs after FDA setbacks

Fresh from an FDA denial of its long-acting testosterone injection and other setbacks, Endo Health Solutions ($ENDP) plans to ax 15% of its workforce in an effort to reduce expenses. The cutbacks come as the Malvern, PA-based company faces generic competition against two of its highest-selling painkillers, Opana ER and Lidoderm.

Last month the company lost its bid for a citizen's petition with the FDA to prevent generics competition to Opana ER. The agency also denied a third attempt at approval of Endo's long-acting testosterone injection Aveed last week, and that bad news closely followed announcements that its CFO Alan Levin and COO Julie McHugh were leaving the company.

With the layoffs, new CEO Rajiv De Silva wants to cull his ranks much further, eyeing eventual cost savings of $325 million annually. As Reuters notes, Endo had a global workforce of 4,629 people as of Feb. 20, so the 15% cuts come at the expense of nearly 700 jobs. Yet De Silva thinks that his move makes sense as he hunts for smallish acquisition opportunities and hones resources on low-risk development candidates that can bring much-needed revenue to the company.

Come September, Actavis ($ACT) is expected to launch a generic rival to Endo's bestseller Lidoderm, an antipain patch that brought in $947.7 million of Endo's $3.03 billion in 2012 revenue.

To raise cash for new business opportunities, Endo is seeking a potential sale of its HealthTronics business and letting go of some early-stage pharma assets.

In other layoff news: Zogenix plans to ax 37% of its workforce or 55 jobs amid a delay in the FDA's decision on approval of the San Diego-based company's ($ZGNX) Zohydro ER, a long-acting opioid painkiller, Xconomy reported

- here's the release
- check out Reuters' article

Editor's note: The story has been updated with added layoff news from Zogenix.