Sector News

Merck & Co. to close plants, cut jobs in $1.2B manufacturing squeeze

May 2, 2019
Life sciences

Merck & Co.’s cancer wunderkind Keytruda continues to turn in supercharged sales, $2.27 billion in the first quarter, which bodes well for the future of biologics manufacturing jobs at the company. But woe to those who work at other facilities, because the company has undertaken a manufacturing restructuring that could cost up to $1.2 billion when the dust settles.

The cuts, which were not announced in the company’s earnings release but slipped (PDF) into a securities filing Tuesday, have essentially begun and are expected to take up to five years, the company said. The Kenilworth, New Jersey-based drugmaker did not provide specifics about how many jobs or facilities will fall in the restructuring but said about 55% of the costs are expected to go to severance and separation and 45% to “accelerated depreciation of facilities to be closed or divested.”

“We will share information about our plans as decisions are finalized,” spokesperson Pam Eisele said in an email. “This plan is part of our ongoing efforts to optimize our manufacturing and supply network and reduce our global real estate footprint.”

The drugmaker expects to take about $500 million in charges for the effort this year, including $187 million that were tallied in the first quarter. It said in total the restructuring should run $800 million to $1.2 billion when it is complete in 2023.

Merck is building its future around new drugs like Keytruda and other cancer fighters under development, as well as a drug for treating hospital-acquired pneumonia and a new antibacterial agent.

Merck has steadily closed older facilities while it pours money into biologics manufacturing. In fact, one site in Ireland that was slated to be closed was salvaged last year by the drugmaker’s hot-selling Keytruda. The company said it would build a new biologics plant at its Swords site near Dublin to produce the blockbuster immuno-oncology therapy. It didn’t disclose the size of the investment but said it would create 350 jobs as part of the deal. The company is shooting to have that operational by 2021.

By Eric Palmer

Source: Fierce Pharma

comments closed

Related News

June 3, 2023

Sanofi’s frexalimab shows early potential in in Phase II multiple sclerosis trial

Life sciences

In 2017, Sanofi partnered with the Lebanon, New Hampshire-based ImmuNext to develop an antibody for autoimmune diseases like lupus and multiple sclerosis, which included giving Sanofi a worldwide license to develop frexalimab. The agreement involved milestone payments upto $500 million.

June 3, 2023

Lonza to acquire Synaffix to strengthen ADC development

Life sciences

Global manufacturer for the pharmaceutical, biotech and nutraceutical markets, Lonza has announced that it has acquired Synaffix, a biotech company focused on the commercialisation of its clinical stage technology platform for the development of antibody-drug conjugates (ADCs).

June 3, 2023

BD taps Novartis, GSK alum Laura Boros to lead drug delivery device business

Life sciences

In its hunt for the new head of its pharmaceutical systems business—which makes syringes, self-injection systems and other drug delivery devices for 70% of the top 100 drugmakers in the world, according to the company—BD landed on a candidate with plenty of experience among that customer group.

How can we help you?

We're easy to reach