Patheon starts winding down Swindon operations
pharmafile | May 10, 2012 | News story | Manufacturing and Production | CMO, Patheon, Swindon, manufacturing
North American contract manufacturer Patheon is winding down some operations at its facility in Swindon, UK, with the aim of transferring production to other sites in its network.
The Swindon site concentrates on the production of cephalosporin antibiotics and other sterile products, and is one of four manufacturing sites Patheon operates in Europe employing more than 400 workers.
Patheon said in a statement that the Swindon plans are part of a global downsizing initiative that will lead to the loss of 91 jobs by the end of the year “across the company’s global pharmaceutical development services (PDS) and commercial operating segments”.
It has been reported that all of these job losses will however come from its Swindon site, with the company also warning that other rounds of job cuts are likely to follow with all 400 jobs at risk of redundancy.
The announcement comes on the back of a difficult period for Patheon, which is in the midst of a major restructuring drive to try to reduce costs and increase profitability across its pharmaceutical manufacturing and development services operations.
The company put the Swindon facility up for sale last year, but having failed to find a buyer has now decided to switch commercial production of non-cephalosporin materials to other facilities over the next two to three years.
Patheon also said it will transfer away from Swindon ongoing PDS projects that require commercialisation activities, in what appears to be a reversal of earlier suggestions that PDS operations at the site would be unscathed. Other cost-cutting measures across the group include the closure of a facility in Puerto Rico, and transferral of assets and operations between sites in Canada and Switzerland.
The CMO also said it had started negotiations with works councils representing the employees at both Swindon and its nearby Milton Park unit, which focuses on early phase development services.
Patheon expects to take a charge of approximately $55 to $65 million for the impairment of long-term assets at Swindon, including $5.6 million in employee termination costs, which will be recorded during the second quarter of 2012.
Meanwhile, Patheon reported first-quarter 2012 results this week which revealed an operating loss of $21 million on revenues down 13 per cent to $154 million compared to the same period of 2011.
Chief executive James Mullen said the first half of the year would continue to be hit by consultancy and other fees related to its restructuring, but these would decline in the second half “when we anticipate recognising real cost savings from our initiatives”.
Phil Taylor
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