| Item 2.05 | Costs Associated with Exit or Disposal Activities |
On April 3, 2019, Recro Pharma, Inc. (the “Company”) implemented a strategic restructuring initiative, and corresponding reduction in workforce, aimed at reducing operating expenses, while maintaining key personnel needed to select a partner and obtain U.S. Food and Drug Administration (“FDA”) approval of intravenous (“IV”) meloxicam. The Company is taking this action following its receipt of a Complete Response Letter from the FDA regarding the Company’s New Drug Application for IV meloxicam. The restructuring initiative includes a reduction of a majority of the Company’s Acute Care Segment workforce by approximately 50 positions. The Company estimates that it will incur approximately $4.0 million of costs in connection with the reduction in workforce related to severance pay and other related termination benefits. The Company communicated the workforce reduction on April 3, 2019 and expects the majority of the costs to be incurred during the quarter ending June 30, 2019.
On April 3, 2019, the Company issued a press release announcing the restructuring initiative and revised CDMO revenue, operating income and EBITDA, as adjusted, guidance for 2019. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form8-K and is incorporated herein by reference.
This Current Report on Form8-K contains “forward-looking” statements, including, without limitation, statements related to the estimated cash expenditures associated withone-time termination benefits and the expected timing for completion of the restructuring initiative. Any statements contained in this Current Report on Form8-K that are not statements of historical fact may be deemed to be forward-looking statements. These forward-looking statements are based upon the Company’s current expectations. Forward-looking statements involve risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the Company’s ability to implement the restructuring initiative as currently anticipated, the impact of the workforce reduction on the Company’s business and unanticipated charges not currently contemplated that may occur as a result of the restructuring initiative. The Company’s Annual Report on Form10-K, filed with the SEC on February 19, 2019, contains under the heading, “Risk Factors,” a more comprehensive description of risks to which the Company is subject. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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