Roche Downsizes Small-Molecule Manufacturing and Exits Four Sites

November 13, 2015

Roche will invest in Switzerland but leave sites in Ireland, Spain, Italy, and the US as it focuses on lower-volume, specialized medicines.

Roche plans to restructure its manufacturing network for small molecules to address the capacity underutilization that has resulted from its evolving portfolio. A new generation of specialized small-molecule therapies requires novel manufacturing technologies and will be produced in lower volumes than traditional medicines, the company explained in a Nov. 12, 2015 press release.

As a result, Roche plans to stop manufacturing at its sites in Clarecastle, Ireland; Leganes, Spain; Segrate, Italy; and Florence, South Carolina in the US. In addition, Roche will invest $297 million (300 million Swiss francs (CHF)) into a dedicated facility in Kaiseraugst, Switzerland to support future technology requirements. This investment will strengthen the company’s development and launch capabilities.

“With these changes we are responding to the evolution of our small-molecule portfolio towards specialized medicines produced in lower volumes,” said Daniel O’Day, COO, Pharmaceuticals Division of Roche. “We are aware of the impact this decision has on our colleagues, and we will do our utmost to support them during this transition.”

In an effort to minimize job reductions, the company is actively looking into divestment opportunities for these facilities. Roche will immediately begin discussions with employee representatives in the respective countries. The transition will begin in 2016 and is planned to end by 2021. It is expected that site exits will result in non-core restructuring costs of CHF 1.6 billion until 2021, of which up to CHF 600 million will be in cash. This also includes additional efficiency efforts undertaken in the manufacturing network and organization. Estimated non-core costs in 2015 are up to CHF 800 million, with only a minor cash flow impact in 2015.

Source: Roche