Patheon will shed another Puerto Rico plant

pharmafile | December 15, 2009 | News story | Manufacturing and Production JLL, Patheon, Puerto Rico 

Contract manufacturer Patheon has taken the axe to its Puerto Rico operations once again, this time marking its facility in Caguas for sale or closure.

Patheon has already shut down one unprofitable facility at Catalina in Puerto Rico, and now says it intends to consolidate all its manufacturing in the country at its Manati site. The Caguas facility is destined for either closure or sale, according to chief executive Wes Wheeler.

Caguas had already been downsized by the contract manufacturer and that effort, along with the closure of Catalina, had helped Patheon’s Puerto Rican operations return to profit at the end of last year after a difficult few years.

However, since then operational problems at the plants, including difficulties in meeting specifications for a key product, meant that Puerto Rico has had a dampening effect on Patheon’s financial performance in 2009.

Manati has been the best performer for Patheon, and in August won import approval from the European Medicines Agency. The plant specialises in high-volume manufacture of solid dosage forms – including tablets, capsules, and powders packaged in bottles – and was recently upgraded to handle high-potency active pharmaceutical ingredients.

Commenting on the decision, Patheon chief executive Wes Wheeler said: “We have decided that it is not practical to operate two plants within close proximity of each other.

“We will consolidate our people, resources and investments at Manati and therefore concentrate on growing one ‘flagship’ site,” he added.

The consolidation is scheduled to be completed by the end of fiscal 2011 and will cost the firm roughly $7 million. Patheon is scheduled to release its fourth quarter and full-year financial results on December 18.

Patheon’s acquisition of JLL

Meanwhile, Patheon said that the Canadian Superior Court of Justice had ratified a settlement agreement signed with private equity firm JLL, which had been vying to seize control of the contract manufacturer.

Under the terms of the settlement JLL has agreed not to purchase any more restricted voting shares in Patheon for one year, in return for four seats on the company’s board and a fee of $1.5 million.

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