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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 25, 1998
SCHEIN PHARMACEUTICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-14019 11-2726505
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(Commission File Number) (IRS Employer Identification No.)
100 Campus Drive
Florham Park, New Jersey 07932
(Address of principal executive offices)
(973) 593-5500
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(Registrant's telephone number, including area code)
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Inapplicable
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS.
On September 28, 1998, Schein Pharmaceutical, Inc. ("Schein") announced
that it will reduce its workforce by approximately 350 employees at its Phoenix,
Arizona facilities. The workforce reduction results from the Food and Drug
Administration ("FDA") action of September 10, 1998 that had the effect of
halting the manufacturing and distribution of all products from Schein's
subsidiary Steris Laboratories, Inc. in Phoenix. Schein is continuing to work
with the FDA to reach a consent agreement.
On September 25, 1998, Schein announced that it had been served with
two class action securities lawsuits and is aware of additional suits since the
FDA action of September 10, 1998.
A copy of each press release referred to above is attached to this Form
8-K as an Exhibit and is incorporated herein by reference.
Certain of the matters discussed in this Current Report on Form 8-K and
in the press releases attached as exhibits hereto contain statements concerning
future events or results. These "forward looking" statements involve certain
significant risks and uncertainties, and actual results may differ materially
from the forward-looking statements. Some important factors which may cause
results to differ include: the difficulty of predicting FDA approvals, the
uncertainty of the actions and responses of the FDA, the uncertainty of
acceptance and demand for the Company's new products, the impact of competitive
products and pricing, the availability of raw materials, uncertainties
associated with litigation and regulatory matters, and fluctuations in operating
results. Other important factors that may cause actual results to differ
materially from the forward looking statements are discussed in the "Risk
Factors" and "Management's Discussion & Analysis of Financial Condition and
Results of Operations" sections of the Company's prospectus dated April 8, 1998,
which is on file with the Securities and Exchange Commission as part of the
Company's Registration Statement on Form S-1. Readers are urged to read the
prospectus carefully to better understand these factors. The Company does not
undertake to publicly update or revise any of its forward looking statements
even if experience or future changes show that the indicated results or events
will not be realized.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS
99.1 Press Release dated September 28, 1998.
99.2 Press Release dated September 25, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SCHEIN PHARMACEUTICAL, INC.
DARIUSH ASHRAFI
Dated: September 30, 1998 By:_________________________________
Dariush Ashrafi
Executive Vice President and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press Release dated September 28, 1998
99.2 Press Release dated September 25, 1998.
Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, NJ 07932
Tel. 973 593-5500
Fax 973 593-5598
PRESS RELEASE
Contact: Melody A. Carey, Investor Relations
Telephone: (973) 593-5535
Fax: (973) 593-5598
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
SCHEIN REDUCES WORKFORCE AT STERIS LABORATORIES
Schein continues negotiations with the FDA toward consent agreement
Florham Park, New Jersey - September 28, 1998 - Schein Pharmaceutical, Inc.
(NYSE:SHP) announced it will reduce its workforce by approximately 350 employees
today at its Phoenix, AZ facilities. The workforce reduction results from the
Food and Drug Administration (FDA) action of September 10, 1998 that had the
effect of halting the manufacturing and distribution of all products from
Schein's subsidiary Steris Laboratories, Inc. in Phoenix.
The Steris facility, one of five Schein manufacturing facilities, manufactures
sterile dosage products, including Schein's branded product INFeD(R), which is
the leading injectable iron product for approximately 175,000 U.S. dialysis
patients. The products manufactured in the Steris facility account for
approximately 40 percent of Schein's sales and 50 percent of gross profits.
Since the FDA action, Schein has been negotiating with the FDA toward a consent
agreement to resume manufacturing and distribution of certain products
manufactured at the Steris facility. Because of the FDA action, Schein had
placed 300 of its approximately 700 Phoenix employees on paid furlough on
September 16, 1998.
"The permanent reduction of our Phoenix workforce is painful for everyone
concerned, but was absolutely necessary," said Martin Sperber, Schein's chairman
and chief executive officer. "We deeply regret that we must take this action.
Steris remains an important facility to Schein. This has been a very difficult
decision for the company."
Schein will provide the employees affected by the reduction with severance
packages that include salary and benefits continuance, job counseling and
outplacement services. These employees include management, operation and
administrative personnel.
"While we have not reached an agreement with the FDA and the final outcome
remains undetermined, we do expect to have a reduced product line manufactured
at the Steris facility. This necessitates the current work force reduction. It
has been our intention to retain products from among those that are particularly
important to the medical community because they are primarily or exclusively
available from Schein or that are economically significant to the Company," said
Mr. Sperber. "We are diligently working with the FDA to reach a prompt and fair
resolution for the Steris facility."
In conjunction with the anticipated product line reduction and work force
reduction, Schein expects to record a special charge in 1998 for severance and
write-off of inventory, fixed assets, intangibles and other related costs, as
well as costs associated with any recalls under Steris' ongoing product quality
monitoring program.
The Steris facility became operational in 1988. Schein also operates four other
manufacturing facilities in Connecticut, New Jersey, New York and Puerto Rico,
none of which is affected by the FDA action.
Schein Pharmaceutical is one of the leading generic pharmaceutical companies in
the United States. The Company develops, manufactures and markets a broad
generic product line through the integration of its product development
expertise, diverse, high-volume production capacity and direct sales marketing
force. The Schein product line includes both solid dosage and sterile dosage
generic products, and the Company is also developing a line of specialty branded
pharmaceuticals. The Company's branded product, INFeD(R), is the leading
injectable iron product in the United States. The Company has a substantial
pipeline of products under development. The Company enhances its internal
product development, manufacturing and marketing capabilities through strategic
collaborations.
Certain of the matters discussed in this press release contain statements
concerning future events or results. These "forward looking" statements involve
certain significant risks and uncertainties, and actual results may differ
materially from the forward-looking statements. Some important factors which may
cause results to differ include: the difficulty of predicting FDA approvals, the
uncertainty of the actions and responses of the FDA, the uncertainty of
acceptance and demand for the Company's new products, the impact of competitive
products and pricing, the availability of raw materials, important factors that
may cause actual results to differ materially from the forward looking
statements are discussed in the "Risk Factors" and "Management's Discussion &
Analysis of Financial Condition and Results of Operations" sections of the
Company's prospectus dated April 8, 1998, which is on file with the Securities
and Exchange Commission as part of the Company's Registration Statement on Form
S-1. Readers are urged to read the prospectus carefully to better understand
these factors. The Company does not undertake to publicly update or revise any
of its forward looking statements even if experience or future changes show that
the indicated results or events will not be realized.
# # #
Editor's note: This release is available on the Internet at
http:/www.noonanrusso.com
Schein Pharmaceutical, Inc.
100 Campus Drive
Florham Park, NJ 07932
Tel. 973 593-5500
Fax 973 593-5598
PRESS RELEASE
Contact: Melody A. Carey, Investor Relations
Telephone: (973) 593-5535
Fax: (973) 593-5598
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
PRESS RELEASE
SCHEIN SERVED WITH TWO SHAREHOLDER SUITS SINCE FDA ACTION
Schein continues negotiations with the FDA toward consent agreement
Florham Park, New Jersey -- September 25, 1998 -- Schein Pharmaceutical, Inc.
(NYSE: SHP) today announced it has been served with two class action securities
lawsuits and is aware of additional suits since the Food and Drug Administration
(FDA) action of September 10, 1998 that halted the manufacturing and
distribution of all products from Schein's subsidiary Steris Laboratories, Inc.,
in Phoenix, AZ.
"We believe that our disclosures were accurate and we plan to defend the
litigations vigorously," said Paul Feuerman, Schein's senior vice president and
general counsel.
Schein is continuing to negotiate with the FDA in an attempt toward a consent
agreement to resume manufacturing and distribution of certain products
manufactured at the Steris facility.
"We are diligently working with the FDA in an attempt to reach a prompt and fair
resolution for the Steris facility," said Martin Sperber, Schein's chairman and
chief executive officer. "The Steris plant is important to Schein. We are
striving to quickly resolve open issues with the FDA." The products manufactured
in the Phoenix facility account for approximately 40 percent of Schein's sales
and 50 percent of gross profits.
The Steris facility, built by Schein, became operational in 1988 and employs
approximately 700 people, of whom 300 have been put on paid furlough since
September 16, 1998. Schein also operates four other manufacturing facilities in
the United States, none of which are affected by the FDA action. Schein
Pharmaceutical is one of the leading generic pharmaceutical companies in the
United States. The Company develops, manufactures and markets one of the
broadest generic product lines in the pharmaceutical industry through the
integration of its product development expertise, diverse, high-volume
production capacity and direct sales and marketing force. The Schein product
line includes both solid dosage and sterile dosage generic products, and the
Company is also developing a line of specialty branded pharmaceuticals. The
Company's branded product, INFcD_, is the leading injectable iron product in the
United States. The Company has a substantial pipeline of products under
development. The Company enhances its internal product development,
manufacturing and marketing capabilities through strategic collaborations.
Schein Pharmaceutical has more than 1,900 employees with manufacturing plants
located in Arizona, Connecticut, New Jersey, New York and Puerto Rico.
Certain of the matters discussed in this press release contain statements
concerning future events or results. These "forward looking" statements involve
certain significant risks and uncertainties, and actual results may differ
materially from the forward looking statements. Some important factors which may
cause results to differ include: the difficulty of predicting FDA approvals, the
uncertainty of acceptance and demand for the Company's new products, the impact
of competitive products and pricing, the availability of raw materials,
important factors that may cause actual results to differ materially from the
forward looking statements are discussed in the "Risk Factors" and "Management's
Discussion & Analysis of Financial Condition and Results of Operations" sections
of the Company's prospectus dated April 8, 1998, which is on file with the
Securities and Exchange Commission as a part of the Company's Registration
Statement on Form S-1. Readers are urged to read the prospectus carefully to
better understand these factors. The Company does not undertake to publicly
update or revise any of its forward looking statements even if experience of
future changes show that the indicated results or events will not be realized.
Editor's note: This release is available on the Internet at
http://www.noonanrusso.com
