Lonza wields axe at US facility
pharmafile | August 28, 2013 | News story | Manufacturing and Production |Â Â Lonza, cutsÂ
Swiss contract manufacturer Lonza has said it will start cutting staffing levels at its US facility in Hopkinton, Massachusetts, next month as it presses ahead with plans to downsize the site.
Hopkinton has been under a cloud since Lonza revealed in its interim results statement in July that the microbial biologics facility would be phased down as the company transfers operations to its main site in Visp, Switzerland.
At the time, Lonza said the move had been prompted by falling earnings resulting from low-cost competition and higher raw material costs, adding that it expected staff reductions across Hopkinton and two other facilities scheduled for closure – Saint-Beauzire in France and Swords in Ireland – to number around 250 by the end of the year.
Hopkinton currently employs around 300 workers and is a pre-clinical to commercial facility that offers a range of Good Manufacturing Practice and process development services for microbial derived products, and was set up in 1997 by Cambrex.
Lonza acquired the unit as part of its takeover of Cambrex’ biologics business in 2007, but in recent years the plant has been affected by quality issues that prompted an FDA warning letter in 2011.
Around 100 jobs at Hopkinton are due to be cut in September, with another 100 going by year-end, said Lonza, which took an impairment charge of 69 million Swiss francs ($75m) in the first half as a result of the downsizing, with another 34 million-franc charge due in the second half.
Once completed, the phasedown and other changes to Lonza’s global manufacturing footprint will result in a cost base reduction of around 100 million francs a year by the end of 2016, according to the company.
Lonza’s profits were down more than 50% in the first half as sales declined more than 10% to 1.74 billion francs. In addition to the downsizing Lonza also exited a joint venture set up with Teva in 2009 to develop, manufacture and market biosimilar drugs.
Phil Taylor
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