Taro will close Irish facility next month
pharmafile | February 22, 2010 | News story | Manufacturing and Production | Sun Pharma, Taro Pharma, manufacturing and production
Israeli drugmaker Taro Pharma has decided to halt manufacturing at a plant in Tipperary, Ireland, resulting in the loss of 30 jobs.
The generic and over-the-counter drug manufacturer said it will close the plant in Roscrea by the end of March. The sterile plant makes a number of injectables, including epinephrine, local anaesthetics bupivacaine and lidocaine and the sedative midazolam.
In a statement, Taro said it was “no longer in the best interests of the company or its shareholders to continue to incur losses at the facility or make the significant capital investments that would be required to achieve the level of operating efficiency found at Taro’s other manufacturing facilities”.
The decision has prompted some unusually frank comments from Indian rival Sun Pharma, whose hostile attempt to take over Taro was thwarted earlier this month by Israel’s Supreme Court.
Sun has been steadily building an equity position in Taro since a $454 million agreement to merge the two businesses was suddenly called off by Taro in 2007.
The Indian drugmaker has invested around $110 million in Taro to date and currently holds around 36% of its equity. That significant minority stake was used as a lever to divert an earlier plan by Taro to sell the Roscrea facility to a group of Irish investors.
At the time of that 2008 announcement Roscrea was reported employ around 60 staff. Taro took over the plant in 2003 and at the time said it planned to create 300 jobs at the site.
A spokesman for Sun Pharma told the Economics Times that the decision reflected the calibre of the management at Taro, “the same management that that led the company to the precipice of bankruptcy only to be saved by Sun’s investments”.
Taro said that it will incur a one-time charge as a result of closing down the Roscrea facility, but expects to improve earnings and cash flow immediately thereafter.
The statement indicated that it intends to keep the plant in good condition in the interim – perhaps indicting that a sale is still an option – and has started a consultation process with the affected employees.
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