Steady stream of closures continues for Merck's bloated manufacturing network

By Dan Stanton

- Last updated on GMT

Related tags Merck & co.

Last quarter alone, three Merck/MSD sites earmarked for closure
Last quarter alone, three Merck/MSD sites earmarked for closure
Merck & Co intends to close ten more manufacturing plants to further shrink its footprint as it continues to restructure after its 2009 megamerger with Schering-Plough.

US drugmaker Merck paid $41bn for Schering-Plough in 2009​ swelling its manufacturing network to 95 sites globally. “Since then, 27 sites have exited the network,”​ according to spokesperson Kyra Lindemann, who told that the cuts will continue.

“Ten additional sites will exit in the future, at which time we will have a total of 58 sites,” ​she added. This is in keeping with comments by CFO Peter Kellogg in a recent conference call discussing third quarter results:

“We do have an ongoing multiyear effort to run our manufacturing network in a more and more efficient manner,”​ he told stakeholders, referring to the “great progress” ​in pushing the number of facilities down to 58.

For the quarter, the Pharma Giant reported sales at just over $11bn, a 4% drop in revenue on last year, blaming loss of exclusivity as the main factor. The patent on asthma drug Singulair, for example, expired August 2012 and sales for this quarter dropped 53% on the same period last year.

European Closures

Within the quarter, the company closed and consolidated its operations in Summit, New Jersey​ and announced the closure of two European manufacturing facilities.

Merck’s hypertension drug Cozaar (losartan) is another product that fell victim to the patent cliff and the company is looking for a buyer for its manufacturing facility in Blavozy, France. According to France3​, 175 jobs at the facility are set to go with a further 80 to go at a nearby facility in Riom.

The second facility is a mainly veterinary medicine plant in Pavia, Italy, with 250 jobs set to go by the end of 2014.

500 jobs to go at West Point

There are further woes on the other side of the Atlantic with 500 jobs set to go at Merck’s West Point facility in Pennsylvania, according to the Department of Labor & Indstry​.

The site was the company’s only global bulk supplier of varicella - used in chickenpox and shingles vaccines - up until September, when Merck announced its Durham, North Carolina site​ had been approved by the US Food and Drug Administration (FDA) to manufacture the ingredient.

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