Sector News

Sweden's Recipharm closing 2 plants, cutting 225 workers

November 15, 2017
Life sciences

Recipharm has been among the CDMOs that have rapidly expanded to get a global footprint and a wider set of services. With the growth now dragging on earnings, the drugmaker will close two plants in Sweden and lay off 225 workers.

The company is closing a tablet plant in the Stockholm area with about 180 workers, as well as a sachet and stick pack filling facility in Höganäs, Sweden, with about 45 workers. The company said it expects to close the Stockholm plant plant by the end of 2019 and “to have discontinued its involvement in operations” at Höganäsby at the end of 2018 at the latest.

The contractor is negotiating with employee representatives and expects to reach decisions by the end of this year and the timetables. It is also talking with clients about whether they want to transfer their work to other Recipharm facilities.

The cuts are a part of its two-year-old process to make its “Solids and Others” business more competitive. It came as the company reported that adjusted net sales fell slightly in the last quarter, while diluted earnings per share slid to SEK 0.26  ($0.03) from SEK 2.13 ($0.25) a share in the same quarter a year ago. Recipharm said given the results, it will find it hard to hit its earlier earnings forecast for the year.

“We will see immediate efficiency improvements from this change and in the long term, it will allow Recipharm to offer a more competitive manufacturing structure for oral solids,” Recipharm CEO Thomas Eldered said in a statement.

The decision to whack the 225 jobs comes just weeks after Recipharm struck a deal to acquire a solid dose products plant in Leganés, Spain near Madrid, taking on 200 Roche workers in that deal. It also negotiated a long-term manufacturing agreement to supply Roche with a number of solid dose products from the plant.

Last year, Recipharm announced it would spend $205 million in a two-part deal with India’s Kemwell, getting development operations in the U.S. and an API manufacturing plant in India. That news came on the heels of the Swedish CDMO acquiring a 74% stake in India’s Nitin Lifesciences for $102 million that gave Recipharm three manufacturing plants that specialize in small-volume production of sterile injectable products. Additionally, the company snapped up Mitim in Italy, which provides sterile liquids manufacturing services, and bought a Swedish company that focuses on solids.

By Eric Palmer

Source: Fierce Pharma

comments closed

Related News

December 3, 2022

Sanofi moves into swanky new Paris HQ designed around hybrid work and sustainability

Life sciences

Monday, the French pharma giant officially moved into its new global home base in Paris, dubbed La Maison Sanofi. The 9,000-square-meter (about 96,875-square-foot) facility comprises two historic buildings and will host around 500 employees, the company explained in a release.

December 3, 2022

As CEO Schultz eyes retirement, Teva taps former Sandoz head Francis as its next leader

Life sciences

On the first day of the new year, former Sandoz chief Richard Francis will take the reins from Schultz, who is hanging up his CEO hat to retire on Dec. 31, Teva said Monday. The news comes a little more than two weeks after Teva publicly said it was looking for Schultz’s replacement.

December 3, 2022

General Electric sets healthcare division spinoff plans

Life sciences

General Electric Co. set the terms for the spinoff of its healthcare division, putting an initial value of roughly $31 billion on the soon-to-be-public company. The Boston conglomerate plans to split into three separate public companies by early 2024. Following the healthcare spinoff, it plans to separate its aerospace business from its power and renewable-energy units.