$500 million in cost savings.. Keep that figure in mind.

Sunday’s announced acquisition of Salix (Nasdaq: SLXP) by Valeant will not quite the turmoil that has engulfed one of the Triangle’s best pharmaceutical success stories. In fact, in the short term, life is likely to get worse in a merger that is likely to lead to job cuts.

And what if another company approaches Salix about a buyout? Should that happen and Salix accept, there would be a $350-million plus breakup fee.

Plus, the Triangle is losing another corporate headquarters just as it did in the Duke-Progress Energy deal, the Talecris merger with Sapin-based Grifols, and others. 

Salix employs some 550 people. 

A publicly traded stock since November of 2000, Salix over the past 15 years built itself into a gastrointestinal disease-focused powerhouse with a host of patents and products. And late last year the future appeared even brighter.

The company appeared to be en route to a $10 billion acquisition by Botox-maker Allergan in September.

That deal fell through due to a huge problem of excessive Salix product inventory.

At that time, Salix shares hit a record high of $172.98 a share. 

However, the inventory disclosure sent shares plummeting to a low of $91.47 on Nov. 7. 

Salix also had planned to acquire an Italian firm, Cosmo, in October for $2.7 billion but that deal was called off due to concerns about changes in U.S. tax policy.

The turmoil over the inventory not only washed out a possible deal but also led to changes at the top.

Long-time Salix CEO Carolyn Logan retired as of Jan. 30. The firm’s CFO left the firm in November after the disclosure of the inventory problem.

More changes are coming now.

Salix shares are trading at $15 a share lower than the peak of the Allergan talks, so that’s bad news for shareholders both inside and outside the company.

However, at risk now are jobs as the companies disclosed in the joint announcement Sunday.

$500 million savings is what buyer Valeant envisions.

The statement:

“The combination is expected to yield greater than $500 million in annual cost savings from the cost base of the combined company.  Synergies are expected to be achieved within six months of close, primarily from reductions in corporate overhead and R&D rationalization, with the cost to achieve these synergies to be approximately 65%. Valeant and Salix will determine how best to integrate the two companies to leverage the combined strengths of both while ensuring a smooth and orderly transition. Consistent with Valeant’s approach to integrating Bausch + Lomb, there are no planned reductions to Salix’s highly rated specialty sales forces or hospital, key account and field reimbursement teams and we will determine the optimal size of Primary Care Sales Force through the integration process.”

MMore details may be spelled out in a conference call this morning about cost cuts, but it appears Salix could take a hit in management and back-office functions (“corporate overhead”).

Research and development jobs appear to be at risk as are some sales jobs.

Based on the statement, the safest employees are in the sales force.

Valeant has another headache estimated to cost $500 million to fix. That’s the Salix inventory problem.

“On November 6, 2014, Salix reported five to nine month wholesaler inventory levels for its top four products.  Valeant has conducted extensive due diligence on Salix’s stand-alone wholesaler inventory levels, stand-alone inventory work down plan, and associated potential litigation and regulatory exposure.  Valeant expects to work down wholesale inventory and plans to target two months or less of wholesale inventory by year-end 2015.  The net impact of the excess inventory on 2015 revenues is expected to be greater than $500 million,” the companies said.